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ARGUMENT 


IN  FAVOR  OF 


THE   CONSTITUTIONALITY 


OF  THE 


GENERAL  BANKING  LAW, 


WITH 


AN     APPENDIX 


y^    i,i^       l^ 


AN 


ARGUMENT, 


IN  FAVOR  OF 


THE  CONSTITUTIONALITY 


OF  THE 


GENERAL  BANKING  LAW 

OF  THIS  STATE, 


DELIVERED  BEFORE  THE  SUPREME  COURT,  AT  THE 
JULY  TERM,  1839. 


BY   SAMUEL    A.  |F^()OT, 

Of  the  city  of  New-York,  Counsellor  at  Law. 


GENEVA: 
IRA    MERRELL,    PRINTER,    SENECA-STREET. 

1839. 


\/ 


ADVERTISEMENT. 

The  history  of  judicial  controversy,  so  far  as  my  knowledge  of 
it  extends,  does  not  furnish  a  case,  in  which  such  an  immense 
amount  of  property  and  such  vital  interests  of  the  community 
were  involved,  as  were  brought  into  discussion  and  subjected  to  judi- 
cial determination,  by  the  argument  of  the  cause  of  Anson  Tho- 
mas, President  of  the  Bank  of  Central  New-York,  against  Samuel 
D.  Dakin,  at  the  last  July  Term  of  the  Supreme  Court  of  this 
State,  held  at  the  city  of  Utica.  The  question  raised,  discussed 
and  submitted  to  the  Court,  in  that  cause,  was,  whether  the  Act  of 
our  Legislature,  entitled,  "  An  Act  to  authorize  the  business  of 
banking,"  passed  the  18th  April,  1838,  and  commonly  called  the 
*'  General  Banking  Law,"  was  constitutional  or  not.  If  it  is  not 
constitutional,  it  is  of  course  void,  and  gives  the  banking  compa- 
nies, formed  under  it,  no  legal  authority  to  conduct  banking  business. 
Every  one  will  readily  see,  the  immeasurable  amount  of  unmixed 
evil  which  must  flow  from  such  a  result.  The  contemplation  of  it, 
even,  is  appalling.  It  became  my  duty  to  take  a  responsible  part 
in  this  grave  discussion. 

The  tens  of  millions  which  have  already  been  invested  under  this 
Statute,  and  now  actively  employed,  and  the  arrangements  which 
have  been  made  for  the  investment  of  hundreds  of  millions,  give 
the  subject  an  unparalleled  importance  as  regards  mere  amount  of 
property.  The  peculiar  moment  too,  at  which  the  question  arises, 
is  most  inauspicious  for  the  business  and  commerce  of  the  country, 
and  the  public  credit  of  the  States  of  our  Union.  The  determina- 
tion of  the  question  will,  moreover,  have  a  material  influence  on  the 
future  legislation  of  this  State,  so  far  as  relates  to  private  incorpo- 
rations ;  and,  it  is  hoped,  may  have  a  beneficial  effect  upon  it,  and 
check,  if  not  entirely  cure,  many  serious  evils  we  now  endure. 


IVI186238 


These  various  aspects  of  the  subject  have  created  great  anxiety 
in  the  public  mind,  as  I  learn,  to  be  informed  of  the  grounds  taken 
in  the  argument,  the  precise  questions  raised  and  discussed,  and  the 
views  taken  and  suggestions  made  by  the  Court. 

The  passing  of  the  present  month  at  this  place  gives  me  an  op- 
portunity, and  I  have  concluded  to  write  out  and  publish  my  argu- 
ment, in  the  hope,  that  its  publication  may  be  of  some  benefit,  at 
least,  in  allaying  the  anxiety  felt  to  be  informed  of  what  occurred 
on  the  discussion,  and  perhaps,  in  exhibiting  the  firm  grounds  on 
which  the  rights  of  those  rest,  who  have  invested  their  property  on 
the  faith  of  a  public  statute  of  our  state. 

SAMUEL  A.  FOOT. 

Geneva,  August  1,  1839, 


HEADS  OF  THE  ARGUMENT. 

Statement  of  the  case — and  how  the  question  arises,  respecting  the  constitutionali- 
ty of  the  General  Banking  Law. 

Preliminary  remarks. 

Propositions  maintained  in  the  argument : 

First.  The  associations  authorized  by  the  Statute  and  organized  under  it,  are  not 
corporations ;  and,  consequendy,  the  clause  in  the  Constitution  of  this  State,  which 
restricts  the  power  of  the  Legislature  in  creating  bodies  corporate,  does  not 
apply  to  it. 

Second.  But  admitting  that  the  associations  are  corporations  ;  still,  this  Statute  is  con- 
stitutional ;  because,  the  restrictive  clause  of  the  Constitution  does  not  prohibit  the 
Legislature  from  passing  a  law,  authorizing  an  indefinite  and  imlimited  number 
of  corporations  ;  or,  in  other  words,  does  not  apply  to  a  general  act  of  incorpora- 
tion ;  and,  consequendy,  the  Legislature  may  now  provide,  by  a  general  law,  for 
the  incorporation  of  an  unUmited  number  of  voluntary  associations ;  as  it  could 
and  did,  in  many  instances,  before  the  adoption  of  the  present  Constitution. 

Third.  Admitting  that  the  constitutional  restriction  does  apply  to  a  general  act  of  in- 

;     corporation ;  nevertheless,  such  an  act  may  be  passed  by  a  two-thirds  vote  ;  and 

the  Statute  in  question,  having  passed  through  the  regular  forms  of  authentication, 

and  appearing  on  the  statute  book,  must  be  presumed  to  have  been  passed  by  the 

reqtusite  constitutional  vote. 

Supreme  <a:ourt» 

Anson  Thomas,  President  of  the  Bank  -v 

of  Central  New- York,  / 

vs.  y 

Samuel  D.  Dakin.*  \ 


This  is  an  action  of  Assumpsit,  commenced  by  declaration  in 
the  usual  form,  upon  three  drafts,  amounting  together  to  about 
five  thousand  dollars,  drawn  by  Dakin,  the  defendant,  in  the 

*  This  cause  was  argued  at  Utica,  before  the  Supreme  Court,  on  the  22d,  23d  and 
24th  days  of  July,  1839,  by  Ward  Hunt,  Esq.,  for  the  defendant,  and  by  C.  P.  Kirk- 
land,  Esq.,  and  the  writer  of  these  pages,  for  the  plaintiff.  3Ir.  Hunt  made  a  full  and 
strong  argument.  Having  evidently  studied  the  cause  thoroughly,  he  presented  his 
propositions  and  sustained  them  with  propriety,  clearness  and  force. 

Mr.  Kirkland  op>ened  the  argument  for  the  plaintiff,  in  a  speech  of  upwards  of  three 
hours  in  length  ;  and  during  the  whole  of  its  delivery,  he  had  the  undivided  attention 
of  the  Court  and  audience.  He  appeared  to  realize  the  very  great  importance  of  the 
question  under  discussion,  and  fuUy  met  it.  His  reasoning  was  forcible  and  conclu- 
sive, and  his  manner,  as  usual,  remarkably  appropriate. 

I  hope  [  may  be  indulged  the  remark,  that  the  Bar  of  this  State  is  in  no  great  dan- 
ger of  declining  in  usefulness  or  pubUc  estimation,  while  genUemen  like  Mr.  Kirkland 
are  rising  into  its  first  ranks. 


months  of  February  and  March  last,  and  of  which  the  Bank  of 
Central  New  York  became  the  owner  and  holder,  by  regular 
indorsement,  and  which,  being  dishonored,  were  regularly  pro- 
tested for  non-payment.  The  defendant  having  neglected  to  pay 
them,  this  suit  was  instituted  by  the  plaintiff,  the  President  of 
that  Bank,  to  enforce  their  collection — and  a  demurrer  to  the 
declaration  has  been  interposed.  On  this  state  of  the  pleadings, 
a  question  is  raised  respecting  the  constitutionality  of  the  Statute, 
entitled,  "  An  act  to  authorize  the  business  of  banking;"  passed 
April  18, 1838,  and  usually  called  the  "  General  Banking  Law ;" 
and  under  which  the  Association  of  which  the  plaintiff  is  presi- 
dent, was  organized  as  a  Banking  Company. 

'  '^he  defendant's  Counsel  contends,  that  the  Statute  is  uncon- 
stitutional, because  the  associations  which  it  authorizes,  and  which 
are,  or  may  be  organized  under  it,  are  corporations ;  and  as 
the  Statute  provides  for  the  creation  of  an  indefinite  number  of 
them,  it  is  in  violation  of  the  ninth  section  of  the  seventh  arti^ 
tide  of  the  Constitution  of  this  State ;  which  is  in  these  words: 
"The  assent  of  two-thirds  of  the  members  elected  to  each  branch 
"of  the  legislature,  shall  be  requisite  to  every  bill  appropriating 
"  the  public  monies  or  property,  for  local  or  private  purposes, 
"  or  creating,  continuing,  altering,  or  renewing  any  body  politic 
*''  or  corporate," 

^TemSk!7,  I*  ^s  ^  source  of  deep  regret,  that  the  defendant,  either 
to  delay  or  defeat  the  collection  of  what  appears  to  be  a  just  de- 
mand, should,  at  this  inauspicious  moment,  in  the  progress  of  our 
Country,  its  commerce  and  business,  attempt  to  raise  a  doubt  of 
the  validity  of  a  law,  which,  thus  far,  has  produced  a  most  benign 
and  beneficial  influence  and  effect,  upon  our  embarrassed  affairs 
and  depressed  community.  Numerous  banking  institutions  have 
been  established  under  it,  which  are  now  in  successful  operation ; 
and  especially,  in  our  commercial  metropolis,  several  have  been 


organized  with  large  and  increasing  capitals,  furnished  by  do- 
mestic and  foreign  capitalists,  relying  on  the  faith  and  sound- 
ness of  our  institutions  and  laws,  which  are  now  in  full  and 
successful  operation,  conducted  by  citizens  distinguished  for  their 
patriotism,  moral  worth  and  financial  experience  and  talents. 
These  institutions  are  already  identified  with  the  business  of 
the  City  ill  which  they  are  located ;  have  extensive  connections 
with  the  monetary  affairs  of  our  State  and  Country ;  are  daily 
engaged  in  large  financial  transactions  with  the  different  States 
of  our  Union ;  and  with  foreign  houses  of  wealth  and  credit, 
with  whom  they  have  already  formed  large  and  substantial 
arrangements,  highly  beneficial  to  our  struggling  commerce, 
which  is  now  seeking  new  foreign  associations,  to  supply  the 
place  of  those  destroyed  by  our  late  commercial  misfortunes. 

Should  the  defendant  succeed  in  his  defence,  or  even  raise  a 
serious  doubt  of  the  constitutionality  of  our  General  Banking. 
Law,  those  beyond  the  reach  and  direct  influence  of  the  activity 
and  excitement  of  our  commercial  emporium,  engaged  in  their 
libraries,  or  taking  refreshing  walks  in  their  quiet  villages  or 
fields,*  can  scarcely  realize  the  extent  or  depth  of  the  injury 
and  distress  produced,  by  destroying,  or  paralyzing  fianancial 
agencies,  so  powerful  and  active,  as  the  banks  established  in  the 
city  of  New  York  under  this  Statute. 

The  bare  agitation  of  this  question  must,  to  some  extent,  im- 
pair confidence,  but  a  real  doubt  will  fly  even  swifter  than  the 
wind  across  the  Atlantic,  defeat  arrangements  to  draw  foreign 
capital  to  the  aid  and  relief  of  our  laboring  and  almost  exhausted 
Country  ;  will  prolong  and  increase  the  feverish  excitement  in 
wl^ich  our  monetary  affairs  are  involved ;  still  farther  dirpinish 
and  phstruct  the  energies  qf  our  s;lowly  and  fitfully  recovering 
coipmerce  and  business. 

*^  AU  the  Justices  of  our  Sopreme  Cq\^  r^de  in  v^l^ges  ia  th^  CfHiotrj^  o^d  ,M>lb 
Chief  Justice  cultivates  a  farm.  .    •  ^  - 


8 


If  the  defence  prevails,  a  deep  and  almost  irreparable  wound 
will  be  inflicted  upon  our  own  citizens.  All  the  banks  ere* 
ated  by  our  General  Law  will  fall  directly  within  the  highly 
penal  provisions  of  the  Restraining  Act,  and  all  the  securities 
held  by  them  will,  consequently,  be  void ;  and  especially  the 
bonds  and  mortgages  taken  and  transferred  to  the  Comptroller, 
and  forming  the  basis  and  security  of  the  most  convenient  and 
safe  currency  ever  devised.  The  bills  will  fall  valueless  on 
a  confiding  and  innocent  community,  and  those  least  able  to 
bear,  will  sustain  the  greatest  losses.  Humble,  but  bright  hopes 
will  be  blighted ;  fair  prospects  of  reasonable  gains,  and  just 
rewards  of  virtuous  industry,  destroyed.  The  associations 
will  be  compelled  to  wind  up  their  affairs ;  prosecutions  will 
multiply,  and  litigations  flood  our  courts.  The  morals  of  our 
citizens  will  become  corrupted  by  holding  out  to  them  strong 
temptations  to  dishonesty.  Every  debtor  to  the  associations  or- 
ganized under  the  law,  who  is  unable  or  unwilling  to  pay  his 
debt,  will  be  invited,  by  the  strong  motive  of  interest,  to  delay, 
if  not  defeat  his  creditor.  The  unprincipled  will  take  advantage 
of  the  misfortune,  to  increase  his  gains  by  plundering  the  meri- 
torious. Confidence  will  be  lost  in  the  security  which  our  laws 
profess  to  give.  Mistrust  will  take  the  place  of  confidence,  vio- 
lence that  of  peace,  and  we  shall  be  carried  rapidly,  by  this  tor- 
rent of  dishonesty  and  crime,  far  towards  anarchy  and  ruin.  Fa- 
cilities for  business  will  also  be  materially  curtailed.  Those 
who  survive  the  shock  will  be  discouraged.  Enterprize,  and 
active  talent  will  leave  the  State,  and  seek  a  more  secure  and 
auspicious  theatre  for  effort. 

Safety  or  security  from  our  laws  can  no  longer  be  hoped  for,  or 
promised.  This  Act  was  passed  on  the  recommendation  of  our  late 
Chief  Magistrate,  and  in  all  its  features  is^in  exact  accordance 
with  his  recommendation.  It  was  passed  by  a  Senate  consisting 
of  a  large  majority  of  his  political  friends,  and  by  an  Assembly  con- 


taining  a  like  majority  of  his  political  opponents.  The  bill  un- 
derwent a  full  discussion  in  each  House,  was  passed  by  a  large 
majority  in  each,  and  received  the  cheerful  approbation  of  the 
Governor.  It  was  given  to  the  community  under  the  highest 
sanctions  that  our  institutions  and  public  opinion  could  bestow. 
It  commanded  and  received  the  wary  confidence  of  the  wealthy 
capitalist,  as  well  as  the  freer  faith  of  the  enterprising  man  of  bu- 
siness. It  has  gone  to  Europe  with  the  recommendations  of  all ; 
is  highly  approved  by  her  most  distinguished  financial  talent ; 
has  and  is  drawing  millions  of  foreign  capital  to  our  shores;  and, 
if  it  should  now  be  prostrated,  not  only  would  the  measure  bring, 
in  foreign  judgment,  great  discredit  on  our  institutions,  and  thus 
check  the  progress  of  liberal  government,  but  it  would  literally 
destroy  all  confidence  in  our  monied  institutions  and  financial 
legislation  ;  withdraw  from  our  country,  to  a  great  extent,  the 
foreign  capital  now  here,  and  entirely  prevent  for  years,  the 
investment  of  any  more.  Such  a  catastrophe  will,  moreover, 
injure,  if  not  seriously  impair,  the  public  credit  of  our  State  ;  she 
will  lose  her  most  powerful  and  willing  supporters  in  carrying 
through  the  several  large  and  extensive  works  of  internal  im- 
provement which  she  has  already,  and  must  soon,  undertake. 
She  has  already  had  substantial  evidence  of  what  she  may  expect 
from  the  banks,  which  have  sprung  up,  at  once,  into  full  stature, 
from  the  ashes  of  the  extinguished  spirit  of  banking  monopoly, 
which  has  so  long  oppressed  all  our  citizens,  except  a  favored 
few.* 

These  views  are  not  presented  with  the  wish  or  expectation, 
that  they  will  deter  this  Court  from  a  fearless  discharge  of  its 
duty,  in  considering  and  determining  upon  the  constitutionality 
of  this  Law,  but  for  the  purpose  of  awakening  a  profound  and 
anxious  attention  to  the  momentous  question  presented  for  their 

*  The  Bank  of  Commerce  has  already  made  large  loans  to  the  State,  by  accepting 
those  offered  to  the  public  by  the  Canal  Bi  ard. 


10 

decision,  and  in  the  hope,  that  they  may  induce  the  Court  to  form 
and  announce  t!:eir  judgment  at  the  earliest  day  possible,  consist- 
ent with  a  just  regard  to  the  grave  character  of  the  subject. 

My  intention  is  to  present  and  fairly  meet  every  argument  or 
suggestion,  which  has,  or  can  be  made  against  the  validity  of 
this  Statute,  whether  insisted  upon  by  the  Counsel  for  the  de- 
fendant, or  not ;  with  the  hope,  that  this  discussion  may  not  only 
satisfy  this  Court  of  its  constitutionality,  but  that  the  public  mind 
may  be  composed,  so  far  as  my  humble  efforts  can  accomplish 
that  end,  by  exhibiting,  in  a  clear  light,  the  firm  basis  on  which 
the  institutions  rest,  which  have  been  organized  under,  and  are 
protected  by  it. 

R^lfrSnrAct.  We  have  in  this  State  prohibited  by  statute  for  sa 
many  years,  both  individuals,  and  companies  incorporated  and 
unincorporated,  not  specially  authorized  by  law,  from  carrying 
on  the  business  of  banking,  and  permitted  it  to  be  done  only  by 
corporations  created  specially  for  that  purpose ;  that  we  have 
come  to  regard  banking  as  a  franchise,  an  attribute  of  sovereign 
political  power,  which  a  citizen  cannot  exercise,  or  acquire,  ex- 
cept by  legislative  grant.  This  is  a  great  error.  The  direct 
converse  of  the  proposition  is  the  truth.  The  States  of  this  Union 
are  prohibited  by  the  Constitution  of  the  United  States  from 
emitting  bills  of  credit.  (Con.  U.  S.  Art.  1,  Sec.  10.)  Although 
the  bills  of  credit,  in  the  mind  of  the  Convention  who  framed  that 
Constitution,  and  intended  to  be  prohibited,  were  unlike,  in  many 
material  respects,  bank  bills  of  the  present  day,  yet  the  Supreme 
Court  of  the  United  States  have  held,  that  "  bills  of  credit"  are 
general  terms  of  broad  import,  and  do  embrace  bank  bills,  issued 
by  a  State,  on  the  faith  of  the  State,  to  circulate  as  money ;  and 
consequently  have  decided,  that  a  State  has  not  authority  to  issue 
such  bills.  (Briscoe  and  others,  vs.  The  President  and  Direct- 
ors of  the  Bank  of  the  Commonwealth  of  Kentucky,  11  Peters' 


11 

R.  257.)  As  issuing  bills  to  circulate  as  money  is  the  most  im- 
portant and  valuable  feature  of  our  system  of  banking,  this  deci- 
sion of  the  Supreme  Court  of  the  United  States  effectually  re- 
strains the  States  from  engaging  in  it. 

We  commenced  our  restraints  upon  private  banking  in  this 
State  at  an  early  day.  On  the  26th  of  May,  1781,  Congress 
incorporated  the  "  Bank  of  North  America,"  and  recommended 
to  the  several  States  of  the  Confederation  to  provide  by  law,  "  that 
no  other  bank  or  bankers  shall  be  established  or  permitted  within 
the  said  States  during  the  war."  In  pursuance  of  this  recom- 
mendation, this  State  passed  an  act  on  the  Hth  April,  1782,  in- 
corporating the  "  Bank  of  North  America"  within  this  State,  and 
declaring,  "  that  no  other  bank,  public  or  private,  shall  be  estab- 
lished within  this  State  during  ihe  present  war  with  Great  Bri- 
tain, on  pain  of  the  forfeiture  of  one  hundred  pounds  for  every 
offence  by  every  person  concerned  in  such  bank  or  banks." — 
(1  Green,  50.)  After  the  treaty  of  1783,  which  secured  our 
independence,  there  was  no  necessity  for  restraining  banking ;  on 
the  contrary,  I  have  understood,  it  was  difficult  to  induce  capi- 
talists to  invest  their  funds  in  such  business ;  and  so  much  so^ 
that  when  "  The  Bank  of  New  York"  was  incorporated,  on  the 
21st  March,  1791,  which  was  the  first  bank  incorporated  in  this 
State  after  the  war,  it  was  diflScult  to  obtain  subscriptions  for  the 
stock,  and  appeals  were  made  to  the  patriotism  of  the  citizens  to 
come  forward  and  take  it  up,  as  a  measure  of  public  benefit.  Af- 
ter incorparating  the  Bank  of  Albany,  on  the  10th  of  April,  1792; 
the  Bank  of  Columbia  at  Hudson,  on  the  6th  March,  1793 ;  the 
Manhattan  Company,  on  the  2d  April,  1799 ;  and  the  Farmers' 
Bank  of  Troy,  on  the  31st  March,  1801  ;  and  pressing  applica- 
tions for  several  others  having  been  made,  the  Legislature,  on 
the  11th  April,  1804,  passed  an  act  entitled,  "  An  act  to  restrain 
unincorporated  banking  companies,"  generally  denominated  the 
«  Restraining  Act."    (3  Web.  615,  27th  Sess.  ch.  117.)     This 


12 

statute  prohibits,  under  heavy  penalties,  all  persons,  associations, 
or  companies,  from  banking,  unless  specially  authorized  by  law. 
This  statute  has  been  continued  to  the  present  time  and  is  still 
in  force,  having  been  strengthened  and  its  severity  increased  from 
time  to  time  by  amendments.  (2  R.  S.  234 ;  Laws  of  1818,  p, 
242,  41st  Sess.  ch.  236,  Sec.  1—2 ;  1  R.  S.  712.)  But  for  these 
laws,  every  citizen,  association,  copartnership  or  company,  would 
have  an  unqualified  right  to  commence  and  carry  on  the  business 
of  banking ;  and  the  very  passage  of  the  acts  shows  the  existence 
of  that  right.  Let  it  then  be  distinctly  understood  and  remem- 
bered, that  banking  is  no  franchise,  no  attribute  of  sovereign 
power,  to  be  granted  by  the  Legislature  to  her  citizens,  either  as 
individuals  or  members  of  associations  ;  but  a  right  that  belongs 
to  them,  unless  taken  away  by  legislative  enactment.  Even  in 
England,  where  privilege  and  monopoly  are  rife,  and  where  the 
very  existence  of  the  government  almost  depends  on  sustaining 
the  Bank  of  England,  the  business  of  banking  is  permitted  to 
all,  except  in  a  comparatively  small  district  around  London. 

of^iVa?lue  ^'^  ^^^  ^^^^  ^^  *^®  statute  under  consideration  ope- 
assaiiabie.  ^^^^^g  ^^  ^  mere  repeal  of  our  restraining  acts,  it  is  not 
only  unobjectionable,  but  meritorious ;  for  so  far,  it  is  a  restora- 
tion of  our  citizens  to  their  former  rights.  Those  sections,  or 
parts  of  the  Statute  only  can  be  assailed,  which  confer  powers 
on  the  associations  which  it  authorises,  analagous  to  those  usual- 
ly conferred  on  corporations. 

^^SS^  An  examination  of  the  statute  will  direct  us  at  once 
to  those  parts  of  it,  which  are  supposed  to  confer  corporate  pow- 
ers.    They  are  the  following : 

"  §  15.  Any  number  of  persons  may  associate  to  establish  offices 
of  discount,  deposite  and  circul  ition,  upon  the  terms  and  conditions, 
and  subject  to  the  HabiUties,  proscribed  in  this  act. 

"  §  16.  Such  persons,  under  their  hands  and  seals,  shall  make  a 
certificate  which  shall  specify  : 


13 

"1.  The  name  assumed  to  distinguish  such  associatioD,  and  to 
be  used  in  its  dealings  : 

"5.  The  period  at  which  such  association  shall  commence  and 
terminate. 

"  §  18.  Such  association  shall  have  power  to  carry  on  the  busi- 
ness of  banking,  by  discounting  bills,  notes  and  other  evidences  of 
debt ;  by  receiving  deposites  ;  by  buying  and  selling  gold  and  sil- 
ver bullion,  foreign  coins  and  bills  of  exchange,  in  the  manner  spe- 
cified in  their  articles  of  association  for  the  purposes  authorized 
by  this  act  ;  by  loaning  money  on  real  and  personal  security  ;  and 
by  exercising  such  incidental  powers  as  shall  be  necessary  to  carry 
on  such  business  ;  to  choose  one  of  their  number  as  president  of 
such  association,  and  to  appoint  a  cashier,  and  such  other  officers 
and  agents  as  their  business  may  require,  and  to  remove  such  pre- 
sident, cashier,  officers  and  agents,  at  pleasure,  and  appoint  others 
in  their  place. 

"  §  19.  The  shares  of  said  association  shall  be  deemed  personal 
property,  and  shall  be  transferable  on  the  books  of  the  association, 
in  such  manner  as  may  be  agreed  on  in  the  articles  of  association  ; 
and  every  person  becoming  a  shareholder  by  such  transfer,  shall, 
in  proportion  to  his  shares,  succeed  to  all  the  rights  and  liabilities 
of  prior  shareholders  ;  and  no  change  shall  be  made  in  the  articles 
of  association,  by  which  the  rights,  remedies  or  security  of  its  ex- 
isting creditors  shall  be  weakened  or  impaired.  Such  association 
shall  not  be  dissolved  by  the  death  or  insanity  of  any  of  the  share- 
holders therein. 

"  §  21.  Contracts  made  by  any  such  association,  and  all  notes 
and  bills  by  them  issued  and  put  in  circulation  as  money,  shall  be 
signed  by  the  president  or  vice-president  and  cashier  thereof;  and 
all  suits,  actions  and  proceedings  brought  or  prosecuted  by  or  on 
behalf  of  such  association,  may  be  brought  or  prosecuted  in  the 
name  of  the  president  thereof;  and  no  such  suit,  action  or  proceed- 
ing shall  abate  by  reason  of  the  death,  resignation  or  removal 
from  office  of  such  president,  but  may  be  continued  and  prosecuted 
according  to  such  rules  as  the  courts  of  law  and  equity  may  di- 
rect, in  the  name  of  his  successor  in  office,  who  shall  exercise  the 
powers,  enjoy  the  rights  and  discharge  the  duties  of  his  predecessor. 

"§22  All  persons  having  demands  against  any  such  associa- 
tion, may  maintain  actions  against  the  president  thereof;  which 
suits  or  actions  shall  not  abate  by  reason  of  the  death,  resignation 
or  removal  from  office  of  such  president,  but  may  be  continued  and 
prosecuted  to  judgment  against  his  successor :  and  all  judgments 
and  decrees  obtained  or  rendered  against  such  president,  for  any 
debt  or  liability  of  such  association,  shall  be  enforced  only  against 
the  joint  property  of  the  association,  and  which  property  shall  be 


14 

liable  to  be  taken  and  sold  by  execution  under  any  such  judgment 
or  decree. 

"  §  23.  No  shareholder  of  any  such  association  shall  be  liable 
in  his  individual  capacity  for  any  contract,  debt  or  engagement  of 
such  association,  unless  the  articles  of  association  by  him  signed 
shall  have  declared  that  the  shareholder  shall  be  so  liable. 

"  §  24.  It  shall  be  lawful  for  such  association  to  purchase,  hold 
and  convey  real  estate  for  the  following  purposes  : 

"  1.  Such  as  shall  be  necessar}^  for  its  immediate  accommodation 
in  the  convenient  transaction  of  its  business ;  or, 

"  2.  Such  as  shall  be  mortgaged  to  it  in  good  faith,  by  way  of 
security  for  loans  made  by,  or  monies  due  to,  such  association ;  or, 

"  3.  Such  as  shall  be  conveyed  to  it  in  satisfaction  of  debts  pre- 
viously contracted  in  the  course  of  its  dealings  ;  or, 

"  4.  Such  as  it  shall  purchase  at  sales  under  judgments,  decrees 
or  mortgages  held  by  such  association. 

"  The  said  association  shall  not  purchase,  hold  or  convey  real 
estate  in  any  other  case  or  for  any  other  purpose  ;  and  all  convey- 
ances of  such  real  estate  shall  be  made  to  the  president,  or  such 
other  officer  as  shall  be  indicated  for  that  purpose  in  the  articles  of 
association ;  and  which  president  or  officer,  and  his  successors, 
from  time  to  time  may  sell,  assign  and  convey  the  same,  free  from 
any  claim  thereon,  against  any  of  the  shareholders,  or  any  person 
claiming  under  them."— [Laws  of  1838,  ch,  260,  p,  245.] 

COT?o"ra!ionf  The  Ordinary  incidents  to  a  corporation  are  well 
stated  by  Chancellor  Kent  in  his  Commentaries.  They  are  : — 
"1.  To  have  perpetual  succession,  and,  of  course,  the  power  of 
electing  members  in  the  room  of  those  removed  by  death  or  oth- 
erwise ;  2.  To  sue  and  be  sued,  and  to  grant  and  to  receive  by 
their  corporate  name  ;  3.  To  purchase  and  hold  lands  and  chat- 
tels ;  4.  To  have  a  common  seal ;  5.  To  make  by-laws  for  the 
government  of  the  corporation  ;  6.  The  power  of  amotion  or  re- 
moval of  members.'^     [2  K.  Com.  pp.  277,  278,  2d  ed.] 

Although  these  are  the  ordinary  powers  of  a  corporation,  they 
are  by  no  means  peculiar  to  it.  Every  one  of  them  probably, 
and  most  of  them  certainly,  may  be,  and  often  are  possessed  and 
enjoyed  by  voluntary  associations,  in  the  form  of  copartnerships, 
or  joint  stock  companies.     And  in  this  respect  the  associations 


15 

authorized  by  the  Statate  are  like  all  other  voluntary  associations 
or  copartnerships.  For  it  must  be  admitted,  that  they  have, 
substantially,  many  of  the  powers  ordinarily  possessed  by  corpo- 
rations. But  that  circumstance  is  far  from  constituting  them 
technically,  legally,  or  really,  bodies  corporate.  The  members 
of  a  strict  copartnership  may  agree  in  their  articles  of  association 
to  have  succession,  perpetual,  or  for  a  designated  number  of  years ; 
by  admitting  the  representatives  of  every  member  who  should 
die,  or  otherwise  cease  to  be  a  member ;  or  by  electing  a  person 
in  his  place ;  or  in  any  other  mode  their  fancy  or  interest  should 
suggest.  They  may  also  agree  to  have  a  common  seal,  and  that 
it  shall  be  affixed  to  all  contracts,  and  that  they  will  not  he  bound 
unless  it  is  so  affixed.  And  such  an  agreement  would  doubtless 
bind  all  the  members  fo  the  copartnership,  and  all  persons  who 
dealt  with  them  and  had  knowledge  of  it.  They  may  also,  by 
agreement,  make,  or  provide  for  making,  by-laws  for  the  govern- 
ment of  themselves,  their  successors  and  agents  ;  and  provide  for, 
and  regulate  the  manner,  and  declare  the  cause  of  removal  of 
the  members  of  the  copartnership.  Yet  copartnerships  are  not 
corporations.  When  viewed  and  compared  in  general,  they  are 
easily  distinguished  ;  but  the  task,  I  apprehend,  is  difficult,  to 
ascertain  satisfactorily,  the  unequivocal  indicia,  and  the  pecu- 
liar and  distinctive  characteristics  of  a  corporation,  which  mark 
it,  and  distinguish  it  from  every  other  legal  or  natural  being. 
And  the  difficulty  is  increased  by  the  consideration,  that  any 
one,  more,  or  all,  of  the  ordinary  powers  of  a  corporation,  may- 
be conferred  by  statute  on  a  joint  stock  company,  and  still  not 
give  it  the  character  of  a  corporation ;  and,  on  the  contrary,  a 
corporation  may  be  created  by  statute,  which  has  only  one,  or 
even  none  of  the  ordinary  corporate  powers,  but  others  which 
better  subserve  the  end  of  its  creation. 

Difficult,  however,  as  the  duty  is,  to  ascertain  and  present 
the  peculiar  features  and  essential  requisites  of  a  corporation, 
its  performance  must  be  attempted  in  the  course  of  this  argument. 


16 

In  this  Country,  there  is  only  one  mode  of  creating  corpora- 
tions, and  that  is  by  statute,  or  in  other  words,  by  grant,  from 
the  sovereign  power.  This  is  a  well  settled  principle  in  our 
jurisprudence.  Whatever  diversity  of  opinion  there  may  have 
been  and  still  is,  respecting  the  power  of  the  Federal  Govern- 
ment to  create  corporations,  for  purposes  within  its  acknow- 
ledged powers  and  duties ;  all  agree,  that  the  several  States 
have  full  authority  to  create  them  for  all  objects  within  the 
range  of  their  legislative  action.  They  have  exercised  this 
portion  of  sovereign  power  freely,  and  in  some  instances  perhaps 
too  freely ;  but  an  ample  apology  for  this  is  found  in  the  reflec- 
tion, that  strength  lies  in  union,  and  emphatically  so  in  this 
Country,  yet  in  its  youth  and  comparatively  without  capital. 
It  has  been  only  by  uniting  and  combining  our  means  and  efforts, 
that  the  resources  of  the  country  have  been  so  rapidly  developed ; 
and  corporations  have  furnished  a  natural,  safe  and  easy  form  of 
association. 

The  usual,  and  I  think  it  may  safely  be  said,  the  only  mode 
of  creating  corporations  in  this  country,  is  by  clear  and  direct 
legislative  enactment ;  declaring  that  certain  persons  thereby  are, 
and  shall  be  a  body  corporate ;  or,  that  if  any  persons  shall  per- 
form certain  prescribed  acts,  then  they  shall  be  a  body  corporate. 
In  either  case,  the  corporation  is  brought  into  being  by  the  de- 
clared will  of  the  sovereign  power,  it  may  be  stated,  without 
qualification,  that  there  is  not  a  corporation  in  this  State,  (and 
it  is  believed  there  is  not  one  in  this  Country,)  which  has  not 
been  created  by  statute,  containing  a  direct  and  explicit  decla- 
ration of  the  will  of  the  Legislature  to  that  effect ;  and  it  may 
well  be  doubted,  if  not  directly  asserted,  that  a  court  ought  not 
to  hold  an  association  to  be  a  corporation,  which  the  Legislature 
has  not  clearly  declared  shall  be  one.  This  view  of  the  subject 
will  be  hereafter  adverted  to  and  more  fully  enforced. 


17 

As  it  is  not  pretended,  however,  that  the  associations  under 
the  General  Banking  Law  are  corporations,  by  virtue  of  a  direct 
and  unequivocal  legislative  enactment,  but  are  so,  in  conse- 
quence of  the  Legislature  having  conferred  on  them  corporate 
powers ;  let  us  meet  the  question,  first,  in  this  aspect. 

The  proposition  being  undeniable,  that  in  this  Country,  and 
especially  in  this  State,  corporations  can  only  be  created  by  Sta- 
tute, it  is  evident,  that  the  Legislature  must  call  them  into  be- 
ing, either  by  a  direct  act,  or,  by  conferring  on  voluntary  asso- 
ciations the  peculiar  characteristics  and  essential  requisites  of  a 
corporation.  And  the  Counsel  for  the  defendant  contends,  that 
the  Legislature  has,  in  the  latter  mode,  constituted  the  associa- 
tions authorised  by  the  General  Banking  Law,  corporations. 

This  leads  directly  to  an  inquiry  after  the  peculiar  features 
and  essential  requisites  of  a  corporation. 

The  result  of  my  reflection  and  investigation  is,  that  there  are 
only  four  distinctive  indicia  which  mark  an  aggregate  corpora- 
tion, and  separate  it  from  every  thing  else. 

They  are, 

First:  A  collective  existence  by  namCy  created  by  the 
sovereign  power,  exercised  directly  or  mediately. 

This  characteristic  is  often  expressed  in  different  language. 
Chancellor  Kent  calls  it,  "a  capacity  to  have  perpetual  succes- 
sion, under  a  special  denomination,  and  an  artificial  form."  [2 
K.  C.  2T7,  2d  ed.]  This  phraseology  indicates  mere  being  by 
name,  to  which  may  be  attached  the  qualities  of  beginning,  end, 
pepetuity,  enjoyment  of  rights  and  the  performance  of  duties. 
Chief  Justice  Marshall,  who  always  appears,  when  discussing 
a  subject,  to  have  his  mind  constantly  fixed  on  the  principles 
3 


and  true  nature  of  things,  speaks  of  this  feature  of  a  corporation 
in  this  way :  "  A  corporation  is  an  artificial  being,  invisible, 
intangible,  and  existing  only  in  contemplation  of  law.  Being 
the  mere  creature  of  law,  it  possesses  only  those  properties  which 
the  charter  of  its  creation  confers  upon  it.  *  *  *  Among 
the  most  important  are  immortality^  and,  if  the  expression  may 
be  allowed,  individuality;  properties,  by  which  a  perpetual 
succession  of  many  persons  are  considered  as  the  same,  and 
may  act  as  the  single  individual.'^  [Dartmouth  College  vs. 
Woodward,  4  Wheat.  Rep.  636.] 

The  existence  of  a  corporation  enables  many  persons  to  have 
succession  in  the  enjoyment  of  the  franchise  conferred  ;  and  if  its 
existence  is  perpetual,  then  perpetual  succession.  Succession, 
however,  is  a  property  of  the  individuals  who  exercise  the  corpo- 
rate rights.  They  succeed  each  other.  But  to  say  that  the  corpo- 
ration itself  has  perpetual  succession,  which  is  the  expression  in 
general  use,  and  sufficiently  accurate  for  general  purposes,  ap- 
pears to  be  a  solecism.  Besides,  there  may  be  aggregate  corpo- 
rations which  have  no  succession.  Twenty  individuals  may  be 
incorporated  on  the  principle  of  tontine,  or  in  other  words,  till  the 
death  of  all  the  corporators  but  one  ;  and  the  share  of  each,  instead 
of  being  transferable,  to  belong  to  the  survivors,  and  the  last  one,  to 
take  the  whole  corporate  fund.  And  in  a  great  variety  of  other 
forms,  aggregate  corporations  may  be  created,  without  giving  to 
them  the  property  of  succession.  Every  corporation  will  be 
without  it,  whose  charter  confines  the  exercise  of  its  corporate 
rights  to  certain  designated  individuals.  Perpetual  succession 
is  wholly  inapplicable  to  corporations  created  for  a  given  time. 
It  can  only  apply  to  those  which  have  perpetuity,  of  which  there 
are  many,  but  not  near  so  many  as  there  are,  whose  existence 
is  to  continue  for  a  definite  period.  Whatever  there  is  of  suc- 
cession, connected  with  a  corporation  which  has  a  fixed  period 
for  its  termination,  is  continued  succession. 


19 

But  succession  is  not  peculiar  to  corporations.  It  often  is, 
and  may  always  be,  a  property  of  voluntary  associations,  if 
the  associates  choose  so  to  agree  in  their  articles  of  association. 
Strict  partnerships  are  frequently  formed  under  an  agreement 
to  admit  succession  of  membership.  Almost  allthe  voluntar}' 
associations  which  have  been  formed  in  this  Country,  within 
the  last  four  or  five  years,  and  there  have  been  not  a  few,  for 
the  purchase  of,  and  speculation  in  lands,  have  contained  provi- 
sions for  succession  of  associates.  The  joint  stock  companies  in 
England,  for  banking  and  other  purposes,  also  have  succession. 

When,  therefore,  we  apply  the  term  succession,  to  a  corpo* 
ration,  as  a  property  peculiar  to  it,  we  express  no  more  than 
mere  continuation  or  being.  A  corporation  has  an  existence 
independent  of  succession,  and  is  known  to  the  law  without 
that  property.  In  grants  of  lands  to  corporations,  the  word, 
*'  successors,"  though  usually  inserted,  is  not  necessary  to  con- 
vey a  fee  simple.  (Ang.  and  Am.  p.  89,  ch.  5,  sec.  5.)  An 
aggregate  corporation  includes  the  idea  of  an  association  of 
two  or  more  individuals ;  and  hence  it  is,  a  collective  existence. 
And  as  its  existence  is  only  in  contemplation  of  law,  it  can 
only  be  known  by  name ;  and  hence  is  a  collective  existence, 
by  name.  And  as  it  can  only  be  created  by  the  sovereign 
power,  exercised  directly  in  calling  it  into  being,  or  more  cir- 
cuitously,  by  prescribing  certain  acts,  the  performance  of  which 
shall  constitute  a  body  corporate,  embracing  those  who  perform 
them,  it  is,  created  by  the  sovereign  power  exercised  directly 
or  mediately. 

Creation  by  sovereign  power,  is  the  peculiar  feature  of  the 
existence  of  a  corporation,  A  partnership,  joint  stock  com- 
pany, and  every  other  voluntary  association,  has  a  collective 
existence,  and  by  name.  But  such  existence  and  name  rest  on 
""infract:  thev  arise  from  the  voluntary  agreement  of  the  asso- 


20 

ciates  :  they  have  their  origin  in  the  will  of  individuals.  Not 
so  with  a  corporation.  It  derives  its  being  from  a  higher  source, 
— from  the  sovereign  power.  The  Legislature,  in  which  that 
power  rests,  speaks,  and  the  corporation  comes  into  being,  with 
the  properties  of  beginning,  continuance  and  end,  unless  the 
creating  power  declares  its  existence  shall  be  perpetual — and 
then,  with  the  properties  of  beginning  and  perpetual  continu- 
ance. Not  only  the  being  itself,  but  the  name  also,  by  which  it 
shall  be  known,  must  come  from  the  same  source,  to  distinguish 
a  corporation  from  other  associations.  This  name,  too,  in  the 
language  of  the  books,  must  be  a  common  name  ;  that  is,  fixed, 
uniform,  unchangable,  not  dependent  on  the  will  of  individuals. 
And  although  a  corporation  may  have  two  names,  one,  "  by 
which  it  may  take  and  grant,  and  another,  by  which  it  may 
plead  and  be  impleaded,"  (Ang.  and  Am.  56,)  yet  whatever 
name  it  has,  must  come,  I  apprehend,  from  the  creating  power, 
and  be  conferred  by  it.  It  is  impossible  to  conceive  of  a  legal 
entity,  taking,  giving,  and  enforcing  rights,  without  a  name. 
With  its  creation,  therefore,  must  be  given  its  name — they  are 
inseparable.  This  intangible,  invisible  existence,  can  only  be 
known  by  its  proper  designation,  and  the  name  must  represent 
the  collective  existence,  not  an  officer  of  the  corporation,  not 
an  individual,  not  any  thing,  except  the  corporation.  It  is  the 
name  of  the  corporation. 

Second  :  A  standing  in  Court  as  a  collective  existence^ 
by  a  given  name  or  designation^  with  the  rights  and  liabili- 
ties  of  a  party  litigant. 

This  is  obviously  an  essential  requisite  of  a  corporation.  It 
can  neither  have  nor  maintain  a  legal  existence,  unless  it  is 
able  to  resort  to  the  judicial  tribunals  of  the  State  to  enforce  its 
rights ;  nor  could  the  community  tolerate  a  being,  which  had 
power  to  enforce  rights  in  its  favor,  and  yet  was  not  amenable 


21 

to  the  courts  of  justice,  so  that  rights  might  be  enforced  against 
it.     As  parties  cannot   litigate  in   our  courts   without  names, 
every  corporation  must  have  a  name  by  which  it  can  sue  and  be 
sued.     This  is  a  feature  which  clearly  distinguishes  corporations 
from  voluntary    associations.     No  such  association  can  sue  or 
be  sued  in  its  assumed  name  ;   but  the  parties,  who  compose  it, 
must  appear  before  the  Court,  or  those  in  whom  their  property 
is  vested  in  trust  for  them.     The  distinction  is  between  the  col- 
lective existence  appearing  by  its  name,  and  individuals  appear- 
ing by  their  names.     In  the  former  case,  the   Court  recognizes 
the  body  corporate  as  a  legal  existence,  having  a  right  to  be 
heard  ;  and  in  the  latter,  it  recognizes  individuals,  who  claim  to 
be  heard  in  their  own  right,  or  as  trustees  for  others.     The  idea 
should  be  kept  distinctly  in  view,  that  this  peculiar  feature  of  a 
corporation  consists  in  the  right  of  the  corporation  itself  to  ap- 
pear in  Court  by  its  ownname,  and  not  in  the  name  of  one  of  its 
officers,  or  of  any  other  person  as  a  trustee  for  it.     Voluntary 
associations,    often,  and   municipal  corporations,    occasionally, 
are  permitted  by  statute  to  sue  and  be  sued  in  the  name  of  some 
officer  or  trustee.     The  joint   stock  companies  in  England,  I 
believe,  are  all  permitted  to  sue  and  be  sued  in  the  name  of 
any  of  their  registered  officers ;  and  several  of  our  cities  and 
villages,  which  are  municipal  corporations,  are  allowed  to  sue 
in  the  names  of  their  officers  ;  but  I  am  not  aware  that  any  pri- 
vate corporation  in  this  State  can  sue  or  be  sued,  except  in  its 
corporate  name.     While  a  voluntary  association  may  be  allow- 
ed, by  statute,  to  sue  and  be  sued  in  the  name  of  one  of  its  offi- 
cers, without  thereby  becoming  a  corporation ;  so,  a  corporation 
may,  by  a  statutory  provision,  sue  or  be  sued  in  the  name  of  one 
of  its  officers,  without  losing   its* corporate  character.     But  a 
collective  existence,  irrespective  of  individuals,  suing  and  being 
sued  by  its  name,  is  a  peculiar  property  of  a  corporation,  and 
belongs  to  no  other  kind  of  association. 


22 

Third  :  Power  to  take  and  convey  title  to  property,  ac- 
quire and  give  rights  as  a  collective  existence,  and  by  its 
given  name  or  designation. 

This  is  another  distinctive  characteristic  of  a  corporation, 
which  separates  it  from  all  other  associations.  When  a  co- 
partnership, or  any  other  unincorporated  company,  takes  a  title 
to  real  or  personal  property,  that  title  is  conveyed  to,  or  vests  in 
the  individual  members  of  the  company,  or  some  of  them,  de- 
signated by  agreement  to  receive  it  for  t!:e  benefit  of  all.  And 
when  title  is  transferred  by  such  an  association  to  a  third  per- 
son, it  is  not  conveyed  by  the  company  in  its  collective  capa- 
city, but  by  the  individuals  who  compose  it,  or  by  those  who 
hold  the  title  for  them.  While  the  company  buy  with  the  com- 
mon fund  and  sell  to  benefit  it,  and  the  transactions  are,  in  fact, 
those  of  the  association,  the  title  to  their  property  comes  and 
goes,  to  and  from,  one  or  more  individuals.  A  corporation, 
alone,  of  all  associated  action,  takes  and  conveys  title,  acquires 
and  gives  rights,  collectively  and  by  its  collective  name. 

Fourth  :  Power  conferred  by  statute  to  make  by-laws,  or 
in  other  words,  to  prescribe  rules  of  action  for  persons, 
without  their  consent. 

This  power  is  always  enumerated  among  the  ordinary  inci- 
dents to  a  corporation ;  but  two  distinguished  writers  have  not 
considered  it  among  the  essential  requisites.  Chancellor  Kent 
has  not  mentioned  it,  when  stating  the  essence  of  a  corporation ; 
(2  K.  C.  277,  2  ed.)  and  Mr.  Kid  expressly  says,  it  "  is  not 
so  inseparably  incident  to  a  corporation  aggregate,  that  it  can- 
not subsist  without  it ;  for  there  are  some  aggregate  corpora- 
tions to  which  rules  and  ordinances  may  be  prescribed,  and 
which  they  are  bound  to  obey."     (1  Kid.  on  Cor.  69.) 


2S 

The  Legislature  may,  ufldoubtedly,  when  creating  a  corpo- 
ration, enact  its  by-laws,  and  prohibit  it  from  making  any  others. 
So  the  Legislature  may  mould  these  artificial  beings  into  any 
form,  which  the  public  interest  may  require,  or  even  the  fancy 
of  a  committee  suggest ;  and  give  them  all,  or  none  of  the  pe- 
culiar features  of  a  corporation,  as  has  been  already  remarked. 
But  when  inquiring,  as  we  now  are,  for  the  distinctive  charac- 
teristics of  a  corporation,  without  reference  to  direct  and  effec- 
tive legislative  action,  the  question  is  not,  what  the  Legislature, 
which  has  unlimited  authority  in  this  respect,  can  do,  or  might 
have  done,  in  any  given  case  ;  but  what  is  the  essence  of  a  cor- 
poration, independent  of  the  creative  action  of  the  sovereign 
power  ? — and  we  are  not  aided  in  the  latter,  by  ascertaining  the 
former.  Hence,  the  remark  of  Mr.  Kid,  that  the  power  to 
make  by-laws  is  not  an  inseparable  incident  to  an  aggregate 
corporation,  because  rules  and  ordinances  may  be  prescribed  for 
some  aggregate  corporations,  which  they  are  bound  to  obey,  ap- 
pears to  be  unsound  in  principle,  and  his  reason^  to  be  wholly 
insufficient  for  his  proposition. 

The  point  of  inquiry  is,  can  a  corporation  exist,  without  by- 
laws ?  and  if  they  are  not  made  for  it,  by  the  power  which  cre- 
ates it,  must  not  the  corporation  itself  have  authority  to  make 
them .?  Chancellor  Kent  takes  his  statement  of  the  essence  of 
a  corporate  body  from  Mr.  Kid,  and  cites  him  as  his  authority ; 
(2  K.  C.  277,  2d  ed.)  We  have  then  only  Mr.  Kid's  assertion, 
for  he  cites  no  authority,  that  power  to  make  by-laws  is  not  an 
inseparable  incident  to  a  corporation. 

A  corporation  acts  wholly  by  agencies.  It  can  do  nothing 
itself.  It  is  a  collective  being,  invisible,  intangible,  and  exists 
only  in  contemplation  of  law.  It  is  neither  seen  nor  felt,  ex- 
cept by  its  agents.  Those  agents  are  its  officers  and  servants  : 
they  act  under  authority,  and  their  duties  and  liabilities  are  re- 


24 

gulated  and  tested  by  the  rules  which  regulate  the  relation  of 
principal  and  agent.     These  are  well  established  principles. 

How  can  a  corporation  have  an  effective  existence,  without 
power  to  prescribe  rules  of  action  for  its  officers  and  servants  ? 
Let  it  have  existence,  a  right  to  sue  and  be  sued,  and  to  take 
and  convey  title  :  can  it  then  act  efficiently  ?  Does  it  not  yet 
want  one  more  requisite  of  life  ?  Does  it  not  want  power  to 
regulate  and  direct  its  action  ?  And  as  it  acts  through  the  in- 
strumentality of  agents  of  all  grades,  from  the  president  down 
to  the  servant,  must  not  that  power  be  one,  which  enables  the 
corporation  to  prescribe  rules  of  action  for  persons  without  their 
consent  ?  The  acts  of  every  corporation  in '  this  State  may  be 
appealed  to  for  the  purpose  of  showing,  that  the  exercise  of  this 
power  is  universal ;  and  I  doubt,  whether  thefe  is  a  corporation 
in  the  State,  which,  if  all  its  by-laws  were  repealed,  and  the 
power  taken  from  it  of  enacting  others,  could  fulfil  the  object 
of  its  creation  ;  and  if  not,  it  must,  of  course,  cease  to  exist. 
This  power,  too,  must  be  exercised  irrespective  of  the  consent 
of  the  persons  affected  by  it :  otherwise,  every  member  or  agent 
of  a  corporation  must  express  his  consent  to  be  bound  by  its  by- 
laws ;  and  when  their  efficacy  depends  on  consent,  their  charac- 
ter is  entirely  changed.  They  then  become  matters  of  contract ; 
they  cease  to  be  laws  and  become  agreements. 

Of  the  latter  character,  are  all  the  rules  and  by-laws  of  vo- 
luntary Associations.  Their  whole  basis  is  contract,  and  the 
superstructure  is  the  same.  Herein  lies  the  difference  between 
corporations  and  all  incorporated  companies.  The  former  have 
authority  from  the  sovereign  power  to  make  by-laws,  and  may, 
therefore,  prescribe  rules  of  action  for  persons  without  their 
consent ;  the  latter  have  no  such  authority,  and  can  only  pre- 
scribe rules  of  action  for  their  members,  agents  or  others,  with 
their  consent ;  and  thus  the  power  to  make  by-laws  which  con- 


25 

trol  the  action  of  individuals  without  their  consent,  is  a  peculiar 
feature  of  a  corporation. 

The  four  requisites  above  stated,  when  united,  constitute  an 
effective  being,  which  can  perform  the  functions  of  legal  life ; 
and  without  either  is  helpless ;  unless  the  defect  is  supplied  or 
other  powers  given  by  statute.  But  to  give  a  voluntary  asso- 
ciation the  character  of  a  corporation,  by  reason  of  its  possessing 
corporate  powers,  we  must  be  satisfied,  that  it  has  all  these  four 
requisites. 

Other  properties  have  been  said  to  be  peculiar  to  corporations ; 
but  do  not  appear  to  be  so,  on  reason  or  authority. 

One  of  those  is  a  Seal,  Formerly  it  was  held,  that  a  corpo- 
ration could  only  be  bound  by  its  seal ;  and  when  that  was  the 
rule,  a  seal  was,  of  course,  of  the  essence  of  a  corporation.  But 
that  rule  has  been  abrogated  for  years.  And  now,  a  seal,  though 
an  ordinary  and  very  important  incident  to  a  corporation,  is  no 
longer  an  essential  requisite.  [Steel  vs.  The  Oswego  Cotton 
Manufacturing  Company^  15  Wend.  R.  265.]  We  must  not, 
however,  undervalue  it.  It  may  be  stated,  without  the  fear  of 
contradiction,  that  the  Legislature  of  this  State  has  never  incor- 
porated a  company  by  special  or  general  act,  without  giving  it 
a  right  to  have  a  common  seal.  It  is  a  universal  index  of  a  cor- 
poration, and  will  aid  materially  in  the  inquiry,  hereafter  to  be  in- 
stituted, respecting  the  intention  of  the  Legislature,  to  constitute 
the  associations  in  question,  corporations. 

Another,  is  the  right  "  of  enjoying  privileges  and  immuni- 
ties in  COMMON.'^ 

Mr.  Kid,  in  his  introduction,  [1  K.  on  Cor.  13,]  specifies  the 
properties  of  a  corporation,  and  among  them  mentions  this  one. 
But  in  the  body  of  his  work,  when  enumerating  the  capacities, 
4 


m 

^*^  necessarily  and  inseparably  incident  to  every  corporation/^ 
does  not  mention  this  as  one.  [1  K.  on  Cor.  69.]  Chancellor 
Kent,  also,  in  his  statement  of  the  essence  of  a  corporation, 
which,  in  this  particular,  is  evidently  taken  from  Mr.  Kid's  intro- 
duction, mentions  the  capacity  to  "  receive  and  enjoy,  in  com- 
mon, grants  of  privileges  and  immunities."  [2  K.  C.  277,  2  ed.] 
The  right  to  receive  and  enjoy  grants  q/"  privileges  and  immu- 
nities, is,  in  the  opinion  of  all,  an  essential  requisite  of  a  corpo- 
ration. It  is  but  a  different  mode  of  expressing  the  right  to  take 
title  to  property  ;  and  to  this  leading  idea,  the  Chancellor's  mind 
was  doubtless  directed.  The  quality  of  enjoying  privileges  and 
immunities  in  common,  to  which  Mr.  Kid  appears  to  have  at- 
tached importance  in  his  introduction,  is  incidentally  thrown  in 
by  Chancellor  Kent,  and  evidently  without  intending  to  present 
it  as  a  necessary  incident.  No  other  author,  and  no  adjudged 
case  mentions  this  property,  as  peculiar  to  corporations ;  and  it 
certainly  is  not,  for  every  voluntary  association  enjoys  all  its 
rights  in  common.  Common  enjoyment,  common  advantages  arq 
incident,  and  necessarily  incident  to  every  association.  Nor  is 
there  any  thing  in  the  character  of  the  objects  enjoyed,  viz  :  pri- 
vileges and  immunities.  For  the  enjoyment  of  them  is  not  pe- 
culiar to  corporations.  Chancellor  Kent,  in  the  sentence  next 
to  the  one  just  quoted,  thus  expresses  himself.  "  According  to 
Ae  doctrine  of  Lord  Holt,  neither  the  actual  possession  of  pro- 
perty, nor  the  actual  enjoyment  of  franchises,  are  of  the  essence 
cif  a  corporation."     [2  K.  C.  277,  2  ed.] 

Another,  is  the  exemption  of  the  members  of  a  company 
from  personal  liability  for  its  debts. 

This  is  said,  by  some,  to  be  peculiar  to  a  corporation,  and  to 
distinguish  it  from  a  partnership.  That  is  a  mistake.  Members 
of  corporations  arc  often  made  personally  liable,  by  the  acts  of 
incorporation,  for  the  debts  of  the  company.  Sometimes  in 
whole,  and  sometimes  in  part.    We  have  many  instances  of  this 


27 

kind  in  our  State,  both  in  om  general  and  special  acts  of  incor- 
poration. We  have  also  a  striking  instance  of  members  of  a  co- 
partnership being  liable,  only  to  a  qualified  extent,  for  the  co- 
partnership debts.  I  allude  to  our  Statute  concerning  limited 
partnerships. 

The  members  of  all  voluntary  associations  may,  by  agreement, 
regulate  the  extent  and  nature  of  their  liability  for  the  company 
debts,  and  such  agreement  will  certainly  bind  the  parties  to  it, 
and,  probably,  all  persons  dealing  with  the  association  and  hav- 
ing knowledge  of  it. 

It  may  doubtless  be  safely  assumed,  that  exemption,  in  whole 
or  in  part,  of  the  members  of  a  company  from  personal  liability 
for  its  debts,  is  not  an  essential  requisite  of  a  corporation. 

Another  J  and  the  last,  is  the  transferability  of  shares  with- 
€mt  any  restriction,  at  the  mere  will  of  the  holder. 

Were  it  not,  that  some  English  cases  countenance  the  idea, 
that  unqualified  transferability  of  shares  is  a  peculiar  feature  of 
a  coporation,  it  would  be  unnecessary  to  dwell  long  on  this 
topic.  For  it  must  be  evident  to  all,  that  this  is  a  matter  which 
may  be  regulated  by  contract  in  all  voluntary  associations ;  and 
may  exist,  or  not,  in  corporations.  Partnerships  and  joint  stock 
companies  not  only  may,  but  do  in  fact,  regulate  the  transfer  of 
stock ;  sometimes  permitting  them,  without  any  restriction  j  at 
others,  restraining  them  to  transfers  on  the  books  of  the  compa- 
ny ;  at  others,  until  the  debts  due  by  the  holder  to  the  company 
are  paid.  And  the  like  provisions  are  often  made  in  our  acts  of 
incorporation  ;  but  more  frequently  the  transfer  of  stock  is  left  to 
the  discretion  of  the  corporation,  with  power  to  regulate  it  in 
their  by-laws. 

The  cases  referred  to  arose  under  an  English  Statute,  which, 
with  the  decisions  upon  it,  furnish  the  strongest  judicial  light  I 


have  discovered  on  the  subject  of  the  essential  requisites  of  a 
corporation ;  and,  although  the  Statute  is  now  repealed,  the  light, 
which  it  elicited,  still  shines,  to  aid  and  direct  the  search  for 
truth.  I  will  pass  for  the  present,  therefore,  the  subject  of  the  _ 
transferability  of  stock j  and  endeavor  by  authority  to  show,  that 
there  are  four,  and  certainly  not  more  than  four,  essential  requi- 
sites of  a  corporation,  and  that  they  are  the  same  which  I  have 
already  stated  and  attempted  to  illustrate. 

The  Statute  and  decisions  are  given  by  Collyer,  near  the  close 
of  his  excellent  Treatise  on  the  Law  of  Partnership.  [Coll.  620 
to  625.]  The  Act,  (6  Geo.  1  c.  18,  s.  18,)  after  reciting,  among 
other  things,  in  substance,  that  several  undertakings  or  projects  of 
diflferent  kinds  have,  at  times,  been  publicly  contrived  and  prac- 
tised to  the  common  grievance  of  great  numbers  of  subjects,  and 
the  persons  who  contrive  them,  presume  ''  to  open  books  for  pub- 
lic subscriptions,  and  draw  many  unwary  persons  to  subscribe 
therein,  towards  raising  great  sums  of  money."  "  And,  whereas, 
in  many  cases,  the  said  undertakers  or  subscribers  have  pre- 
sumed to  act  as  if  they  were  corporate  bodies,  and  have  pretended 
to  make  tlieir  shares  transferable  or  assignable  without  any  legal 
authority,"  &c.  ;  for  remedy  enacts,  among  other  things,  that  all 
such  undertakings,  "  and  more  particularly  the  acting,  or  pre- 
suming to  act,  as  a  corporate  body,  the  raising,  or  pretending  to 
raise,  transferable  stock,  transferring,  or  pretending'  to  transfer, 
or  assign,  any  share  in  such  stock,  without  legal  authority,  &c., 
shall  be  deemed  illegal  and  void."  A  subsequent  section  declares 
these  offences  public  nuisances,  and  subjects  the  offenders  to  the 
penalties  o{  prcemunire,  to  fines  and  punishments. 

A  single  case  occurred  under  the  Act  about  two  years  after  it 
was  passed ;  a  person  being  found  guilty  on  an  information,  "  for 
setting  up  a  bubble  called  the  North  Sea."  From  that  time  un- 
til 1808,  an  interval  of  about  eighty-seven  years,  the  Statute 


appears  to  have  been  forgotten.     In  that  year  a  case  occurred 
under  it,  and  soon  afterwards  several  others. 

"  The  ofiences,"  says  Mr.  Collyer,  "  which  are  more  particularly 
pointed  out  by  the  Statute,  are,  the  presuming  to  act  as  a  corpo- 
rate body — the  raising  transferable  stock — the  transferring  such 
stock ;  *         *         *         *     ^ 

"With  regard  to  the  specific  ofTcnees  mentioned  by  the  act,  it 
seems  to  have  been  universally  agreed,  that  the  acting  as  a  corpo- 
rate body  is  an  offence  very  difficult  to  be  defined.  It  may  perhaps 
be  inferred,  from  other  parts  of  the  statute,  that  this  enactment  was 
directed  against  persons  who  pretended  to  be  in  possession  of  some 
charter  of  incorporation,  and  not  against  every  species  of  society. 
But,  however  this  may  be,  it  seems  to  be  unquestionable,  that  there 
are  particular  offences  of  this  nature  for  which  an  indictment  will 
lie,  not  only  under  the  statute,  but  even  at  common  law.  It  is  ap- 
prehended, however,  that  the  more  general  charge  of  acting  as  a 
corporation  would  not  be  sufficient  to  support  an  indictment  at  com- 
mon law,  but  that  there  must  be  additional  averments,  stating  with 
particularity  the  nature  of  the  offence.* 

"  As  to  the  particular  offences  alluded  to,  it  seems  more  easy  to  say 
what  is  not,  than  what  is  an  act  of  assuming  a  corporate  capacity. 
It  is  clear,  that  the  assuming  a  common  name,  for  the  purpose  of 
designating  the  society,  the  using  a  common  sealj  and  making  regu- 
lations by  means  of  committees,  boards  of  directors,  or  general  meet- 
ings, were  not  illegal  within  the  statute,  arid  are  not  illegal  at  com- 
mon law.  In  the  King  v.  Webb,  Lord  Ellenborough  said — '*  As  to 
the  fourth  point,  that  the  subscribers  have  presumed  to  act  as  if 
they  were  a  body  corporate,  \\ow  is  this  made  out  ?  It  was  urged 
that  they  assumed  a  common  name,  (which,  however,  does  not  ap- 
pear to  have  been  the  case,)  that  they  have  a  committee,  general 
meetings,  and  power  to  make  bye-laws  ;  but  are  these  the  unequivo- 
cal indicia  and  characteristics  of  a  corporation  ?  How  many  unin- 
corporated insurance  companies,  and  other  descriptions  of  persons, 
are  there,  that  use  their  common  name,  and  have  their  committees, 
general  meetings,  and  bye-laws  1  Are  these  all  illegal  ?  or  which  of 
these  particulars  can  be  stated,  as  being  of  itself  the  distinctive  and 
peculiar  criterion  of  a  corporation.  So,  in  the  case  of  Ellison  v. 
Bignold,-\  where  it  appeared  that  the  directors  of  an  insurance  com- 

*  See  MCaUum  v.  Turtoii,  2  Younge  &  Jerv.  183. 

1 2  Jac.  &  Walk.  503 :  and  see  Pearce  v.  Piper,  7  Ves.  1 ;  Carlen  v.  Dmry,  1  Ves. 
&  Bea.  157.  But  Lord  Eldon's  opinions  in  these  cases  seem  to  have  been  guided  by 
his  own  notion  of  the  utility  or  inutility  of  each  association  as  they  passed  in  review 
before  him.  He  seems  to  have  considered,  that  the  mischievous  tendency  of  the  as- 
sociations was  a  question  for  tlie  Judge  and  not  for  the  jury.  See  Lloyd  v.  Loaring^ 
6  Ves.  776. 


30 

pany  had,  by  their  deed  of  settlement,  the  power  of  making  orders 
and  bye-laws,  and  that  a  seal  was  to  be  fixed  upon  for  the  use  of 
the  company,  it  was  urged  that  this  amounted  to  an  assumption  of 
a  corporate  character ;  but  Lord  Eldon  appears  to  have  taken  no 
notice  of  this  objection,  and  to  have  considered  the  legality  of  the 
association  as  depending  entirely  on  the  manner  in  which  the  shares 
were  made  transferable.  In  addition  to  these  authorities  we  may 
add,  that  the  numerous  acts  of  Parliament  for  enabling  certain  com- 
panies to  sue  and  be  sued  by  their  secretary,  seem  to  assume  the 
legal  existence  of  the  various  powers  of  which  we  have  just  been 


"  It  seems  clear,  therefore,  that  whether  we  view  this  subject  with 
reference  to  the  repealed  statute,  or  the  existing  common  law,  they 
alone  are  to  be  considered  as  assuming  to  act  as  a  corporate  body, 
who  usurp  the  "  unequivocal  indicia  and  characteristics  which  form 
the  distinctive  and  peculiar  criterion  of  a  corporation."  It  is  not 
to  be  doubted,  however,  that  they  who  are  parties  to  proceedings  of 
this  nature  are  guilty  of  an  offence  in  law.  Thus,  corporate  bodies 
alone  can  use  a  common  name  for  the  purpose  of  suing,  contract- 
ing, conveying,  or  accepting  conveyances ;  and  to  affect  the  use  of 
a  common  name  for  these  purposes,  would,  perhaps  in  every  case, 
be  contrary  to  law.  Again,  corporate  bodies  have  the  power  of 
binding  their  members  by  the  acts  resolved  upon  in  the  manner  pre- 
scribed by  their  charters,  which  power  they  derive  from  their  cor- 
porate character,  and  not  from  contract  and  agreement  between 
themselves  ;*  on  the  other  hand,  voluntary  associations  are  governed 
entirely  by  the  rules  which  the  parties  have  themselves  agreed  to. 
Hence,  if  the  committees  or  meetings  of  an  unincorporated  society 
were  to  assume  to  exercise,  independently  of  any  contract  or  agree- 
ment for  that  purpose,  a  general  power  of  binding  their  members,  it 
might  reasonably  be  contended  that  such  an  act  was  illegal  and  in- 
dictable. The  only  act,  however,  which  has  been  expressly  stated 
to  be  an  assuming  to  act  as  a  corporation,  is  that  of  making  the 
shares  transferabUf  without  any  restriction,  at  the  mere  will  of  the 
holder. 

"  The  wm'ver^anilegality  of  this  proceeding  was  doubted,  as  we 
have  before  observed,  by  Lord  Ellenhorough.  But,  in  Joseph  v. 
Pebrer,^  it  was  held  to  be  universally  illegal,  not  only,  as  it  should 
seem,  under  the  words  of  the  statute  on  that  particular  point,  but 
with  reference  to  the  more  general  offence  of  acting  as  a  corpora- 
tion. This  manner  of  treating  the  subject  leads  to  the  conclusion, 
that,  since  the  statute  has  been  removed,  a  proceeding  of  this  nature 

*  See  Adley  v.  Whitstaph  Company,  17  Ves.  315. 
t3  Bam.  &  Cres.  639;  5  Dowl.  &  Ryl.  512. 


31 

is  to  be  considered  as  an  ofTence  at  common  law ;  and  the  words  of 
Best,  C.  J.,  in  a  subsequent  case,  are  confirmatory  of  this  opinion. 
"  There  can  be  no  transferable  share  of  any  stock,  except  the  stock 
of  corporations,  or  of  joint  stock  companies  created  by  acts  of  Par- 
liament. Indeed,  the  members  of  corporations  cannot  assign  their 
interest,  and  force  their  assignees  into  the  corporation,  without  the 
authority  of  an  act  of  Parliament.  Such  authority  is  expressly 
given  by  the  Bank  acts,  the  South  Sea  acts,  and  by  other  statutes, 
creating  companies  that  possessed  stock,  which  it  was  deemed  pro- 
per to  render  transferable.  The  pretending  to  be  possesed  of  trans- 
ferable stock,  is  pretending  to  act  as  a  corporation  and  pretending 
to  possess  a  privilege  which  does  not  belong  to  many  corporations.* 
"  But  where  the  shares  are  not  transferable  at  the  mere  unre- 
stricted option  of  the  holder,  the  association,  as  far  as  relates  to  that 
matter,  will  be  legal.  In  the  case  of  The  King  v.  Wehh,  which  has 
been  so  often  referred  to,  the  shares  could  not  be  transferred  to  any 
person  who  would  not  enter  into  the  original  covenants  :  nor  could 
more  than  twenty  be  held  by  the  same  person,  unless  they  came  to 
him  by  operation  of  law ;  and  the  object  of  the  society,  which  was 
to  supply  the  inhabitants  of  Birmingham,  being  shareholders,  with 
bread  and  flour,  virtually  limited  the  transfer  of  shares  to  persons 
residing  in  the  neighborhood.  And  the  Court  of  King's  Bench  glad- 
ly availed  themselves  of  these  circumstances,  in  order  to  hold  the 
association  legal.  So,  in  Pratt  v.  Hutchinson, '\  which  was  the  case 
of  a  building  company,  no  person  could  become  a  member  of  the 
company  until  he  had  made  himself  a  party  to  the  partnership  arti- 
cles, nor  until  he  had  been  proposed  and  approved  by  a  certain  ma- 
jority of  persons  present  at  the  meeting  of  the  society.  And  the 
Court  held,  that  these  restrictions  on  the  transfer  of  the  shares  pre- 
served the  legality  of  the  association." 

From  these  cases,  the  diflSculty  is  evident,  of  ascertaining, 
satisfactorily,  the  peculiar  characteristics  of  a  corporation.  Aside 
from  the  transferability  of  stock,  which  will  be  hereafter  exam- 
ined, it  would  appear,  that  "  corporate  bodies  alone  can  use  a 
common  name  for  the  purpose  of  suing,  contracting,  conveying, 
or  accepting  conveyances ;"  and  that  they  **  have  the  power  of 
binding  their  members  by  the  acts  resolved  upon  in  the  manner 
prescribed  by  their  charters,  which  power  they  derive  from  their 
corporate  character." 

*4Bing.267. 

tl5  East,  511 ;  and  see  Davies  v.  Hawkins,  3  Mau.  &  Selw.  488. 


3r 

These  are,  substantially,  die  second,  third,  and  fourth  requi- 
sites before  stated.  The  first,  viz.,  collective  existence  by  name, 
is  not  alluded  to  in  these  cases,  and  doubtless  because,  the  Sta- 
tute did  not  declare  it  illegal  to  assume  to  6e,  but  to  act,  as  a 
body  corporate,  and  the  attention  of  the  Court,  consequently,  was 
not  turned  to  that  feature  of  a  corporation. 

There  is  some  further,  though  less  direct  light  on  the  subject, 
in  our  own  state. 

This  Court  in  the  case  of  The  People  vs.  Morris,  [13  Wend. 
335,]  speak  of  the  properties  of  a  corporation  in  this  manner — 
"  They  (towns)  possess  every  requisite  to  constitute  them  corpo- 
rations, besides  being  declared  to  be  so  by  statute.  Each  town, 
as  a  body  corporate,  has  capacity  to  sue  and  be  sued ;  to  purchase 
and  hold  real  estate ;  to  make  such  contracts,  and  hold  such  per- 
sonal property  as  may  be  necessary  to  its  corporate  and  admin- 
istrative powers ;  and  to  make  such  order  for  the  disposition, 
regulation  and  use  of  its  public  property  as  may  be  conducive 
to  the  interests  of  the  inhabitants." 

The  Legislature  declared,  by  statute,  in  1830,  what  should  be 
the.  incidents  to  all  corporations  thereafter  created. 
The  Act  is  as  follows : 

"§  1.  Every  corporation,  as  such,  has  power, 

"  1.  To  have  succession  by  its  corporate  name,  for  the  period 
limited  in  its  charter ;   and  when  no  period  is  limited  perpetually  : 

"  2.  To  sue  and  be  sued,  complain  and  defend,  in  any  Court  of 
law  or  equity : 

"  3.  To  make  and  use  a  common  seal,  and  alter  the  same  at 
pleasure  : 

"  4.  To  hold,  purchase,  and  convey  such  real  and  personal  estate, 
as  the  purposes  of  the  corporation  sliall  require,  not  exceeding  the 
amount  limited  in  its  charter  :  • 

"  5.  To  appoint  such  subordinate  officers  and  agents,  as  the  bu- 
siness of  the  corporation  shall  require,  and  to  allow  them  a  suitable 
compensation : 

"  6.  To  make  by-laws,  not  inconsistent  with  any  existing  law, 


33 

for  the  management  of  its  property,  the  regulation  of  its  affairs,  and 
for  the  transfer  of  its  stock."    [1  R.  S.  599—600.] 

The  first,  second,  fourth,  and  sixth  incidents  are  essential ; 
the  third  and  fifth,  ordinary  and  convenient. 

The  counties  and  towns  of  this  State  have,  by  statute,  the  es- 
sential requisites  of  corporations.  [1  R,  S.  364 ;  337.]  The 
laws  giving  them  are  in  the  following  words : 

"  §  1.  Each  county,  as  a  body  corporate,  has  capacity, 

"  1.  To  sue  and  be  sued  in  the  manner  prescribed  by  law : 

"  2.  To  purchase  and  hold  lands  within  its  own  limits,  and  for 
the  use  of  its  inhabitants  ;  subject  to  the  power  of  the  Legislature 
over  such  limits : 

"3.  To  make  such  contracts,  and  to  purchase  and  hold  such  per- 
sonal property  as  may  be  necessary  to  the  exercise  of  its  corporate 
or  administrative  powers  :  And, 

"  4.  To  make  such  orders  for  the  disposition,  regulation,  or  use 
of  its  corporate  property,  as  may  be  deemed  conducive  to  the  inter- 
ests of  its  inhabitants."  ^ 

"§  1.  Each  town,  as  a  body  corporate,  has  capacity, 

"1,  To  sue  and  be  sued,  in  the  manner  prescribed  in  the  laws  of 
this  State  ; 

"  2.  To  purchase  and  hold  lands  within  its  own  limits,  and  for 
the  use  of  its  inhabitants,  subject  to  the  power  of  the  Legislature 
over  such  limits : 

"  3.  To  make  such  contracts,  and  to  purchase  and  hold  such  per- 
sonal property,  as  may  be  necessary  to  the  exercise  of  its  corporate 
or  administrative  powers  :  And, 

"  4.  To  make  such  orders  for  the  disposition,  regulation  or  use 
of  its  corporate  property,  as  may  be  deemed  conducive  to  the  inte- 
rests of  its  inhabitants." 

The  counties  and  towns,  having  been  previously  created,  and 
then  existing  by  name,  became  possessed,  on  the  passage  of 
these  sections  of  the  Statute,  of  all  the  essential  features  of  cor- 
porations ;  and  yet  they  are  not  considered,  strictly,  corpora- 
tions. Chancellor  Kent  denominates  them  Quasi  Corporations. 
[2  K.  C.  278,  2ded.]  And  this  Court,  in  the  case  of  The  Peo- 
ple vs.  Merris,  (13  Wend.  R.  335,)  holds  them  to  be  political, 
or  municipal  corporations.   They  are,  certainly,  not  private  cor- 


34 

poratlons ;  for,  although  they  have  all  their  essential  requisites, 
they  have  other  characteristics,  so  important  and  controlling,  as 
to  place  them  in  another  class  of  legal  entities.  They  do  not 
embrace  a  few  individuals  and  exclude  the  many.  They  cover 
the  whole  community.  All  may  come  within  their  jurisdiction. 
They  have  legislative,  judicial,  and  executive  properties.  Their 
powers  are  exercised  for  the  public  benefit,  and  not  for  the  ad- 
vantage or  profit  of  a  few.  Their  existence  and  properties  show 
the  uncontrolled  power  of  the  Legislature  to  create  legal  beings 
and  cast  them  from  any  mould,  new  or  old,  and  the  impossibility 
of  confining  the  exercise  of  that  power  to  any  known  forms  of 
legal  existences. 

Chancellor  Kent  has  given  the  essence  of  an  aggregate  corpo- 
ration with  more  accuracy  than  any  other  author.  He  says, 
"  And  the  essence  of  a  corporation  consists  only  of  a  capacity  to 
have  perpetual  succession,  under  a  special  denomination,  and  an 
artificial  form,  and  to  take  and  grant  property,  contract  obliga- 
tions, and  sue  and  be  sued,  by  its  corporate  name,  and  to  receive 
and  enjoy,  in  common,  grants  of  privileges  and  immunities." 
[2K.  C.  277,  2ded.] 

No  controversy  has  ever  arisen,  within  my  knowledge,  ex- 
cept the  present,  which  turned  on  the  single  question,  what  are 
the  essential  features  of  a  corporation  ?  The  cases  on  the  En- 
glish Statute,  blend  that  with  other  subjects,  and  not  one  of  them 
is  placed  entirely  on  that  ground.  It  is  not  strange,  therefore, 
that  there  should  be  looseness  of  thought  and  inaccuracy  of  ex- 
pression on  the  subject. 

After  giving  to  it  the  fullest  reflection  and  examination  in  my 
power,  I  submit  to  the  better  judgment  of  the  Court,  the  four  es- 
sential requisites  above  stated,  as  the  only  ones  which  enter  into 
and  form  the  essence  of  a  corporation. 


35 

The  next  step  in  the  argument,  is  to  examine  our  Statute 
which  authorizes  the  business  of  banking,  and  see  if  the  associa- 
tions which  it  permits  have  these  essential  features  of  a  corpo- 
ration. Before  proceeding  to  that,  however,  I  will  revert  io^ 
and  dispose  of,  the  alleged  corporate  feature,  which  consists  of 
the  transferability  of  stock. 

It  will  be  observed,  that  this  property  is  not  mentioned  by 
any  author,  nor  in  any  case,  except  the  English  cases,  as  a  cor- 
porate attribute.  It  appears  to  have  originated  wholly  from  the 
English  Statute ;  and  the  error  of  considering  it  a  corporate 
property,  has  arisen,  I  apprehend,  from  a  want  of  care  in  judg- 
ing of  it,  as  a  distinct  offence,  which  it  is  by  that  Statute,  in- 
stead of  judging  of  it  as  a  corporate  act,  and  as  such,  an  offence 
by  the  Statute.  A  few  references  to  the  language  of  the  Ac^ 
and  the  decisions  upon  it,  will  show  this. 

The  recital  is — "  And  whereas,  in  many  cases,  the  said  under- 
takers and  subscribers  have  presumed  to  act  as  if  they  were  cor- 
porate bodies,  and  have  pretended  to  make  their  shares  trans- 
ferahle  or  assignable  without  any  legal  authority,'^  &c.  And 
the  enactment  is,  that  such  undertakings,  "  and  more  particular- 
ly the  acting  or  presuming  to  act  as  a  corporate  body,  the  rais- 
ing, or  pretending  to  raise^  transferable  stocky  transferring^  or 
pretending  to  transfer^  or  assign  any  share  in  such  stock,  with- 
out legal  authority,  §*c.,  shall  be  deemed  illegal  and  void."^ 

"  The  offences,"  says  Mr.  CoUyer,  "  which  are  more  particu- 
larly pointed  out  by  the  Statute,  are,  the  presuming  to  act  as  a 
corporate  body  ;  the  raising  transferable  stock ;  the  transferring 
such  stock." 

The  transferring  of  stock  is  thus  obviously  a  distinct  offence 
from  that  of  presuming  to  act  as  a  corporate  body.     Either  might 


be  committed  and  punished  without  the  other.  Yet  says  Mr. 
Collyer,  in  a  subsequent  page — "  The  only  act,  however,  which 
has  been  expressly  stated  to  be  an  assuming  to  act  as  a  corpora- 
tion, is  that  of  making  the  shares  transferable  ivithout  any  re- 
striction, at  the  mere  ivill  of  the  holder. ^^  He  adds — "  The 
universal  illegality  of  this  proceeding  was  doubted,  as  we  have 
before  observed,  by  Lord  EUenborough.  But  in  Joseph  v.  Pre- 
her,  [3  Barn.  &  Cres.  639 ;  5  Dowl.  &  Ryl.  542,]  it  was  held 
to  be  universally  illegal,  not  only  as  it  should  seem,  under  the 
words  of  the  Statute  on  that  particular  point,  but  with  reference 
to  the  more  general  offence  of  acting  as  a  corporation."  C.  J. 
Best,  in  a  subsequent  case,  [4  Bing.  267,]  says :  "  There  can 
be  no  transferable  shafe  of  any  stock,  except  the  stock  of  corpo- 
rations, or  of  joint  stock  companies  created  by  acts  of  Parlia- 
ment.'^ 

This  language  is  loose  and  confusing,  and  clearly  shows,  that 
the  minds  of  these  distinguished  jurists  were  far  from  being  di- 
rected to  the  question,  whether  transferability  of  stock  is  an  es- 
seiitial  property  of  a  corporation.  C.  J.  Best  states  it  in  sub- 
stance, as  an  unqualified  proposition,  that  shares  of  stock  are  not 
transferable,  except  by  act  of  Parliament.  With  great  respect, 
that  is  an  error.  The  stock  in  every  voluntary  association,  by 
agreement  of  the  associates,  may  be  transferable  at  the  will  of 
the  owner,  as  has  been  already  stated  and  illustrated ;  and  daily 
practice  confirms  it. 

But  from  whatever  source  the  notion  came,  that  transferabili- 
ty of  stock  was  an  exclusive  attribute  of  a  corporation,  or  how- 
ever well  it  is  sustained  by  authority,  one  position  respecting  it 
is  clear,  and  in  that  all  the  cases  concur,  viz  :  that  to  render  the 
transferability  of  shares,  a  corporate  property,  the  shares  must 
be  transferable  at  the  mere  unrestricted  option  of  the  holder. 
And  where  the  shares  could  not  be  transferred  to  a  person  who 


37 

would  not  enter  into  the  original  covenants :  and  where  the  same 
person  could  not  hold  more  than  twenty  shares ;  and  where  the 
transfer  of  shares  was  limited  to  persons  residing  in  the  neigh- 
borhood ;  and  where  a  person  could  not  become  a  member  of  a 
company  till  he  had  signed  the  partnership  articles,  nor  until 
he  had  been  approved  by  a  certain  majority  of  persons  present 
at  a  meeting  of  the  society — the  Court  of  King's  Bench  gladly 
availed  themselves  of  these  circumstances,  to  hold  the  associa- 
tions valid,  under  the  English  Statute,  and  of  course,  that  such 
restricted  transferability  was  not  a  corporate  attribute.  [CoU- 
yer  624,  625,  and  cases  there  cited.] 

There  is  only  one  clause  in  our  General  Banking^  Law  which 
regulates  the  transfer  of  stock ;  and  that,  instead  of  permitting 
the  shares  of  the  associations,  to  be  transferred  at  the  mere,  unre- 
stricted option  of  the  holder,  subjects  them  to  two  statutory  re- 
strictions, and  also  to  as  many  others  as  each  association  may 
think  proper  to  impose.  The  words  of  the  clause  are,  "The 
shares  of  said  association  shall  be  deemed  personal  property,  and 
shall  be  transferable  on  the  books  of  the  association,  in  such 
manner  as  may  be  agreed  on  in  the  articles  of  association  ; 
and  every  person  becoming  a  shareholder  by  such  transfer,  shall, 
in  proportion  to  his  shares,  succeed  to  all  the  rights  and  lia- 
bilities of  prior  shareholders." 

First  :  The  shares  are  transferable  on  the  books  of  the  asso- 
ciation. 

Second  :  The  transferee  succeeds,  not  only  to  the  rights,  but 
to  the  liabilities  of  the  prior  shareholders.  These  are  imposed 
by  law  upon  him. 

Third  :  The  shares  are  transferable  on  the  books  of  the  as- 
sociation, in  such  manner  as  may  be  agreed  on  in  the  articles 
of  association.     This  enables  each  association  to  impose  just 


38 

such  restrictions  as  it  pleases  ;  and  so  obviously  is  the  holder  of 
stock  in  the  associations  restrained  from  transferring  his  stock  at 
his  mere  unrestricted  option,  that  it  seems  unnecessary  to  oc- 
cupy more  time  with  this  topic. 

^^hlTstatut"  °^  '^^^®  ^^^y  "^^^^  appears  open,  to  examine  those  parts 
of  our  General  Banking  Law,  which  are  supposed  to  confer  cor- 
porate powers  on  the  associations  which  it  authorizes,  and  ascer- 
tain, whether  the  associations  have  all,  or  any  of  the  four  essen- 
tial requisites  of  a  corporation  before  stated. 

FiKST  :  Has  every  association  a  collective  existence  by  name,  cre- 
ated by  the  sovereign  power,  exercised  directly  or  mediately  ? 

There  are  only  parts  of  two  sections  of  the  Statute  which  re- 
late to  this  corporate  feature,  viz  :  the  first  clause  of  the  fifteenth 
section,  and  the  first  and  fifth  sub-divisions  of  the  sixteenth  sec- 
tion.    They  are, 

«  §  15.  Any  number  of  persons  may  associate  to  establish  offices 
of  discount,  deposit  and  circulation,"  &c. 

"  §  16.  Such  persons,  under  their  hands  and  seals,  shall  make  a 
certificate  which  shall  specify  : 

"  1.  The  name  assumed  to  distinguish  such  association,  and  to  be 
used  in  its  dealings." 

"  5.  The  period  at  which  such  association  shall  commence  and 
terminate." 

The  force  and  true  meaning  of  the  clause  of  the  fifteenth  sec- 
tion cannot  be  fully  apprehended,  without  reading  it  in  connec- 
tion with  the  act  to  restrain  unauthorized  banking.  That  act  is 
as  follows: 

"§  1.  No  person  unauthorized  by  law,  shall  subscribe  to,  or  be- 
come  a  member  of,  or  be  in  any  way  interested  in,  any  association, 
institution  or  company,  formed,  or  to  be  formed,  for  the  purpose  of 
receiving  deposits,  making  discounts,  or  issuing  notes,  or  other  evi- 
dences of  debt  to  be  loaned  or  put  in  circulation  as  money."  &c. — 
(1  R.  S.  711.) 


39 

Who  can  fail  to  see,  that  the  object  of  passing  this  clause  of 
the  fifteenth  section  of  the  General  Banking  Law,  was  to  repeal, 
in  effect,  the  first  section  of  the  Restraining  Act,  and  open  bank- 
ing to  the  community?  The  Legislature  evidently  intended  to  al- 
low any  person,  who  chose,  to  become  a  member  of  an  association 
to  conduct  the  business  of  banking.  And  when  they  say,  "  any 
number  of  persons  may  associate  to  establish,"  &c.,  is  it  not, a 
perversion  of  their  language^  to  insist,  that  they  thereby  call 
into  being  an  indefinite  number  of  corporations  ?  The  enactment  is 
merely  permissive.  It  only  removes  a  previous  legal  restraint,  and 
allows  free  action.  It  creates  nothing ;  but  allow^s  parties  to  con- 
tract with  each  other  to  accomplish  an  object  theretofore  unlawful. 
This  will  appear  the  more  evident,  by  comparing  the  language 
with  that  of  our  general  acts  of  incorporation.  Take,  for  exam- 
ple, the  Act  relative  to  incorporations  for  manufacturing  pur- 
poses. The  first  section  directs,  that  "  any  five  or  more  persons, 
who  shall  be  desirous  to  form  a  company ,^^  &c.,  "  may  make, 
sign,  and  acknowledge,  before  a  justice  of  the  Supreme  Court,^' 
&c.,  "  a  certificate  in  writing,  in  which  shall  be  stated  the  cor- 
porate name  of  said  company,"  &c.  And  the  second  section 
enacts,  "  that  as  soon  as  such  certificate  shall  be  filed  as  afore- 
said, the  persons  who  shall  have  signed  and  acknowledged  the 
said  certificate,  and  their  successors,  shall,  for  the  term  of  twenty 
years  next  after  the  day  of  filing  such  certificate,  be  a  body  poli- 
tic and  corporate,  in  fact  and  in  name,  by  the  name  stated  in 
such  certificate,  and  by  that  name,"  &c.  [3  R.  S.  310.] 

Under  this  law,  a  corporation  is  brought  into  existence  by  le- 
gislative enactment.  Under  the  General  Banking  Law,  an  associ- 
ation is  formed  by  contract,  by  agreement  of  the  parties.  By  that 
law,  any  number  of  persons  may  associate — and  if  they  do  asso' 
ciate^it  is  their  own  voluntary  act ;  and  their  association  derives 
its  being  from  their  mutual  consent — and  in  like  manner,  may 
be  dissolved  at  their  pleasure.     They  are  allowed  by  agree- 


ment  to  fix  the  period  of  its  commencement  and  termination, 
as  in  all  other  cases  of  voluntary  associations — time  of  com- 
mencement and  dissolution,  like  a  strict  co-partnership  ;  and  if  the 
parties  are  dissatisfied  with  each  other,  or  the  business,  they  may 
by  general  consent  dissolve  at  any  time  before  the  period  fixed 
for  the  termination  of  the  association.  In  these  respects,  the 
associations  are  wholly  unlike  corporations.  The  latter  always 
have  a  period  fixed  by  law  for  their  commencement  and  termi- 
nation, unless  they  are  perpetual ;  and  then,  their  perpetuity  is 
likewise  declared  by  law,  and  it  is  not  in  their  power  to  dissolve 
themselves.  They  may  commit  acts  which  forfeit  their  exist- 
ence, but  cannot  dissolve  at  pleasure. 

•  Furthermore  :  it  is  understood  to  be  the  true  construction  of 
this  Statute,  and  that  such  construction  was  deliberately  given  to 
it  by  the  late  Comptroller  and  Attorney-General,  after  full  and 
mature  examination,  to  authorize  any  individual  to  conduct  the 
business  of  banking  according  to  its  provisions.  And  it  is  a  well 
known  fact,  that  several  individuals  have  deposited  their  respect- 
ive securities  with  the  Comptroller,  received  bills,  and  are  now 
prosecuting  the  business  of  banking  in  their  respective  offices,  and 
on  their  respective  accounts.  If  this  is  the  true  construction  of 
the  Act,  and  there  appears  to  be  no  reason  to  doubt  it,  there 
would  seem  to  be  an  end  of  all  pretence  even,  that  those  who 
avail  themselves  of  its  provisions  are  corporators.  The  Statute 
certainly  does  not  constitute  each  of  the  individuals  referred  to, 
a  corporation,  or,  in  other  words,  give  each  of  them  a  corporate 
existence. 

Nor  does  the  statute  give  a  name  to  the  association  formed 
under  it,  as  is  always  the  case,  when  a  corporation  is  created ; 
nor  does  it  adopt  any  selected  by  the  parties,  as  in  the  general 
act  of  incorporation  for  manufacturing  purposes.  The  name  of 
each  association  is  given  by  agreement  of  the  associates.     They 


4L 

determine  and  agree  what  it  shall  be.  It  is  given  by  contract 
and  not  by  Statute.  It  comes  from  the  will  of  individuals,  and 
not  from  the  one  sovereign  power.  Besides,  the  associations 
have  no  common  name  by  which  they  are  known ;  by  which 
they  take  and  give  title  and  make  contracts,  and  by  which  they 
sue  and  are  sued.  Nor  have  they  two  names,  one  by  which 
they  may  take  and  grant,  and  another,  by  which  they  may  sue 
and  be  ^ued.  They  have  only  one  name,  and  that  for  a  single 
purpose,  viz :  "  to  be  used  in  their  dealings."  They  neither 
take,  nor  grant,  nor  make  contracts  in  that  name,  nor  do  they 
sue,  nor  are  they  sued  by  it,  as  will  be  more  distinctly  seen  when 
other  sections  of  the  Statute  are  examined, ' 

Second  :  Hcls  every  association  a  standing  in  Court,  as  a  coUec. 
five  existence  by  a  given  name  or  designation,  with  the  rights  and  lia- 
bilities  of  a  party  litigant  1 

The  clauses  of  the  Statute  which  relate  to  this  part  of  the 
subject,  are  found  in  the  twenty-first  and  twenty-second  sections. 
These  are  as  follows  :  "  and  all  suits,  actions  and  proceedings 
brought  or  prosecuted  by  or  on  behalf  of  such  association,  may 
be  brought  or  prosecuted  in  the  name  of  the  president  thereof.^' 
"  All  persons  having  demands  against  any  such  association,  may 
maintain  actions  against  the  president  thereof." 

The  ground  taken  by  the  Counsel  for  the  defendant  is,  that  the 
suits  permitted  by  these  provisions  of  the  Statute,  are  to  be 
brought  and  prosecuted  in  the  name  of  the  office  of  the  president 
of  the  association,  and  not  in  the  name  of  the  person  who  fills  the 
office — and  that  each  association  has,  therefore,  a  name  given  to 
it  by  Statute,  by  which  it  sues  and  is  sued. 

This  is  obviously  an  erroneous  construction  of  the  Act.     The 
title  of  this  very  cause  is  a  practical  evidence  of  the  error.     It  is 
in  the  name  of  Anson  Thomas,  president,  &c. ;  and  not  in  the 
6 


42 

name  of  The  President  of  the  Bank  of  Central  New  York. 
The  language  of  the  Statute  shows,  that  the  office  of  president  is 
referred  to  as  a  mere  description  of  the  person,  in  whose  name  the 
suit  may  be  bronght,  and  against  whom  it  may  be  maintained. 
The  words  are ;  "  all  suits,  &;c.,  **  may  be  brought  or  prosecuted 
in  the  name  of  the  president  thereof,"  and  not  in  the  name  of 
the  office  of  president  thereof.  So,  *'  all  persons"  ^c,  "  may 
maintain  actions  against  the  president  thereof,''  and  not  against 
the  office  of  president  thereof.  But  there  are  other  clauses  in 
these  same  two  sections  of  the  Statute  which  are  conclusive  of 
its  construction. 

If  the  suits  may  be  brought  in  the  name  of  the  office  of  presi- 
dent, or  maintained  against  the  office  of  president ;  then  no  suit, 
brought  in  the  name  of  that  office,  or  against  it,  would  abate  by 
the  death,  resignation,  or  removal  of  the  officer.  But  in  the 
twenty-first  section,  the  Legislature  provide ;  that  no  "  suit,  ac- 
tion, or  proceeding,"  "brought  or  prosecuted  in  the  name  of  the 
president  thereof,"  "  shall  abate  by  reason  of  the  death,  resigna- 
tion, or  removal  from  office  of  such  president^  but  may  be  con- 
tinued and  prosecuted  according  to  such  rules  as  the  courts  of 
law  and  equity  may  direct,  in  the  name  of  his  successor  in  of 
fice,^^  So  also,  in  regard  to  suits  against  the  president,  the 
twenty-second  section  contains  the  following  provision  ;  "  which 
suits  or  actions  shall  not  abate  by  reason  of  the  death,  resigna- 
tion, or  removal  from  office  of  such  president,  but  may  be  con- 
tinued and  prosecuted  to  judgment  against  his  successor,^^ 

After  reading  these  provisions,  argument  surely  is  unnecessa- 
ry to  show,  that  the  suits  are  to  be  brought  in  the  name  of,  and 
against  the  person  holding  the  office  of  president ;  and  that  the 
office  is  used  in  the  Statute  merely  as  a  description  of  the  person. 

Another  consideration  arises  in  this  connection ;   and  that  is. 


43 

that  when  a  president,  who  ik  either  plaintiff  or  defendant,  dies, 
the  suit,  though  not  abated,  is  suspended,  until  a  successor  is 
appointed ;  and  when  so  appointed,  the  suit  does  not  proceed, 
of  course,  against  him  without  any  proceeding  in  court,  but 
"  according  to  such  rules  as  the  courts  of  law  and  equity  may 
direct.'^  Which  proceeding  would  naturally  be,  a  suggestion  on 
the  record  of  the  death  of  the  president  in  whose  name  the  suit 
was  pending,  and  the  appointment  of  his  successor,  and  an 
order  thereon,  that  the  suit  proceed  in  the  name  of  the  successor. 

How  unlike  is  all  this  to  a  corporation !  A  corporation  never 
dies  ;  that  is,  if  not  perpetual,  it  lives  out  its  known  and  appoint- 
ed day.  It  has,  as  we  have  already  seen,  a  continued  existence^ 
or,  in  other  words,  a  continued  succession.  A  suit  in  its  name 
never  abates  ;  for  it  never  dies,  resigns,  or  removes.  What  sort 
of  a  corporation,  therefore,  must  that  be,  which  has  not  a  contin- 
ued existence  by  name,  so  as  to  have  a  continued  standing  in 
court  ? 

But  again :  The  Statute  in  respect  to  suits  brought  in  the 
name  of,  or  against  the  president,  is  only  permissive.  The  lan- 
guage is,  "  all  suits,''  &c.,  "  may  be  brought,'^  &c. ;  "all  per- 
sons,''  <Sz;c.,  ^^may  maintain  actions,"  &;c. 

Hence,  any  association,  or  individual,  who  is  banking  under 
the  law,  may  sue,  the  former,  in  the  name  of  the  association,  and 
the  latter,  in  his  own  name.  In  like  manner,  any  creditor  of 
any  such  association,  or  individual,  may  sue  the  associates,  or  in- 
dividual. Either  course  would  undoubtedly  be  attended  with 
great  difficulties  in  respect  to  parties,  when  such  a  suit  should  be 
attempted  in  favor  of,  or  against,  the  members  of  an  association; 
ajid  probably  would  be  impracticable  for  any  useful  end ;  but 
still,  the  right  so  to  sue  remains. 


44 

Here,  it  may  be  said,  how  entirely  unlike  a  corporation! 
There  is  not  even  an  approach  to  an  analogy.  A  right  to  sue 
in  the  name  of  the  individual  members  of  a  company  is  an  ex- 
clusive attribute  of  a  voluntary  association  ;  it  has  not  the  most 
distant  resemblance  to  a  corporate  power. 

A  suggestion  was  made  by  the  Counsel  for  the  defendant,  in 
the  course  of  his  argument,  that  the  statutory  provision  in  the 
twenty-second  section,  that  "  all  judgments  and  decrees  obtained 
or  rendered  against  such  president  for  any  debt  and  liability  of 
such  association,  shall  be  enforced  only  against  the  joint  property 
of  the  association,  was  analogous  to  the  legal  effect  of  a  judg- 
ment against  a  corporation.  And  so  it  is.  But  what  of  that. 
Many  rights  and  liabilities  of  voluntary  associations  are  analo- 
gous to  those  of  corporations.  The  question  is,  whether  it  is  a 
peculiar  feature  of  a  corporation.  If  it  is,  then  several  other 
statutory  provisions  in  regard  to  judgments  upon  joint  liabilities 
may  be  said  to  have  the  same  effect. 

Our  Statute  declares  that  on  the  arrest  of  one  of  several  joint 
debtors,  a  judgment  may  be  rendered  against  all,  and  enforced 
against  the  joint  property  of  all.  [2  R.  S.  377.]  The  statutory  re- 
gulation of  suits  by  and  against  a  limited  partnership  is,  that "  suits 
in  relation  to  the  business  of  the  partnership,  may  be  brought 
and  conducted,  by  and  against  the  general  partners,  in  the  same 
manner  as  if  there  were  no  special  partners."  [1  R.  S.  766.  §14.] 
The  effect  of  the  judgment,  of  course,  is  to  bind  the  copartner- 
ship property.  This  legislative  enactment,  respecting  suits  by 
and  against  limited  partnerships,  is  very  similar  in  form,  and 
cannot  be  distinguished  in  substance,  from  that  respecting  suits 
by  and  against  the  banking  associations ;  and  yet,  I  apprehend, 
that  no  one  ever  seriously  thought  a  limited  partnership  had  any 
thing  in  common  with  a  corporation ;  except,  perhaps,  that  in 
Chancery,  the  general  partners,  as  lately  held  by  the  Chancel- 


45 

lor,  ami  the  directors  of  a  corporation,  are  responsible  as  trus- 
tees of  their  respective  common  funds.  But  such  responsibility 
is  far  too  general,  to  be  called  a  peculiar  corporate  attribute. 

Third  :  Has  every  association  power  to  take  and  convey 
title  to  property  J  acquire  and  give  rights  as  a  collective  exist- 
ence, and  by  its  given  name  or  designation  ? 

The  parts  of  the  Statute  supposed  to  be  applicable  to  this  fea- 
ture of  a  corporation,  are  in  the  twenty-fourth  section.  That 
section,  after  specifying  the  purposes  for  which  an  association 
may  purchase,  hold  and  convey  real  estate,  enacts ;  "  and  all 
conveyances  of  such  real  estate  shall  be  made  to  the  president, 
or  such  other  officer  as  shall  be  indicated  for  that  purpose  in 
the  articles  of  association ;  and  which  president  or  officer,  and 
his  successors,  from  time  to  time,  may  sell,  assign,  and  convey 
the  same,"  &c. 

On  comparing  this  provision  of  the  Statute,  with  what  has 
been  said  concerning,  and  in  illustration  of  this  third  corporate 
feature,  the  wide  difference  will  be  seen,  between  a  corporation's 
taking  and  granting,  by  its  corporate  name,  and  taking  and  grant- 
ing in  the  manner  directed  by  this  Act. 

There  is  no  room  to  doubt,  but  that  every  conveyance  is  to  be 
made  to  the  person  w^ho  fills  the  office  of  president,  or  to  some 
other  person  who  holds  some  other  office  in  the  association.  The 
associates  of  each  association  have,  therefore,  a  right  of  selecting 
a  trustee  of  their  real  property  from  the  whole  body  of  their 
agents,  from  their  president  down  to  their  porter.  The  Legis- 
lature has  not  even  designated  the  trustee.  They  have  only 
said,  if  you  select  none  for  yourselves,  then  we  will  select  for 
you,  your  president  3  but,  as  we  allow  you  to  elect  your  presi- 
dent and  other  officers,  we  give,  you  unrestricted  choice.  The 
right  of  selection,  therefore,  is  uncontrolled ;  and  is  as  full,  as 


# 


46 

the  right  of  the  members  of  any  voluntary  association,  to  select 
a  trustee  for  themselves,  to  take  the  title  to  their  real  property 
for  their  benefit. 

It  appears  to  be  so  clear,  that  the  associations  do  not  take  or 
grant  real  estate  by  their  collective  name,  if  they  can  be  consid- 
ered as  having  one  for  any  purpose,  that  it  seems  unnecessary  to 
spend  more  time  with  this  branch  of  the  argument. 

The  next  question  is,  where  is  the  title  to  the  personal  prop- 
erty of  the  associations?  The  answer  is  obvious.  The  Statute 
having  made  no  provision  on  the  subject,  it  is  where  the  com- 
mon law  places  it,  viz  :  in  the  members  of  the  respective  asso- 
ciations ;  and  subject  to  such  custody,  control  and  management, 
as  they  have  designated  and  agreed  to,  in  their  respective  articles 
of  association.  And  this  shows,  that  the  right,  still  belonging 
to  the  associations,  to  sue  in  the  names  of  their  members,  is  no 
shadow,  but  a  practical  reality. 

The  vesting  of  the  title  of  the  real  property  of  the  associations 
in  a  trustee,  who  is  always  selected  by  themselves  ;  and  of  their 
title  to  their  personal  property,  in  the  members  of  the  associa- 
tions, shows  how  impossible  it  is,  to  hold  them  to  be  corpora- 
tions. 

Fourth  and  last  :  Has  every  association  power  conferred 
by  the  Statute  to  make  by-laws^  or  in  other  words^  to  prescribe 
rules  of  action  for  persons  without  their  consent '^ 

The  only  expression  in  the  Statute,  which,  by  the  greatest 
stretch  of  imagination,  can  be  said  to  have  any  relation  to  this 
power,  is  found  in  the  eighteenth  section  ;  that  section  gives  and 
prescribes  the  power  of  the  associations^  and  states  it  to  be,  "to 
carry  on  the  business  of  banking,  by  discounting  bills,'^  &c.,  vn 


47 

the  manner  specified  in  their  articles  of  association,  for  the 
purpose  authorized  by  this  act. 

On  this  part  of  the  subject,  it  seems  sufficient  to  say,  that 
whatever  authority  is  given  to  the  associations  by  these  words 
of  the  Act,  such  authority  is  merely  permissivey  and  that,  what- 
ever regulations  or  rules  it  authorizes  the  associations  to  make, 
such  regulations  and  rules  are  to  be  specified  in  their  articles 
of  association ;  and,  of  course,  are  purely  matters  of  contract, 
and  derive  their  whole  force  and  authority  from  the  consent  of 
the  parties  to  be  bound  by  them. 

This,  as  we  have  seen,  is  a  feature  peculiar  to  the  by-laws  of 
voluntary  associations,  and  distinguishes  them  from  corporations. 
The  by-laws  of  the  latter,  deriving  their  force  from  the  Statute, 
and  emanating  from  the  sovereign  power,  bind  those  subject  to 
them  without  their  consent ;  while  those  of  the  former,  deriving 
their  force  from  consent,  and  emanating  from  contract,  only  bind 
those  subject  to  them  with  their  consent.  Tl:e  very  terms  em- 
ployed, show  the  difference  between  incorporated  and  unincor- 
porated companies ;  and  terms  are  no  unimportant  indication  of 
thought.  The  former  is  a  corporation,  the  latter  a  voluntary 
association ;  the  former,  exists  by  force  of  a  statute — the  latter, 
by  force  of  a  contract ;  and  so  their  respective  by-laws :  one 
binds  by  contract^  and  the  other  by  Statute. 

In  concluding  this  analysis  and  examination  of  the  Statute,  one 
remark  seems  to  be  required  in  regard  to  these  associations  ha- 
ving, in  different  forms,  several  of  the  general  powers  of  corpo- 
rations. It  is  true  that  they  have  ;  and  so  have  all  citizens  of 
full  age,  all  voluntary  associations,  and  every  being,  who  has 
and  exercises  legal  rights,  and  prosecutes  judicial  remedies. 

Franchises  are  rights  which  can  only  emanate  from  the  sove- 
reign power,  and  are  generally  granted  to  corporations,  but  often 


48 

to  individuals,  and  companies  not  incorporated  ;  and  the  Legisla- 
ture oftentimes  confers  the  privilege  of  possessing  and  enjoying 
property,  and  exercising  rights,  upon  persons  and  associations, 
not  otherwise  allowed  by  law — and  such  privilege  is  also  gene- 
rally conferred  in  the  form  of  an  act  of  incorporation  :  hence,  at 
an  early  day,  the  idea  was  suggested,  that  these  were  incidents 
to  corporations ;  but  they  are  not  peculiar  to  them,  and  so  it  has 
been  decided  in  England.  Lord  Holt,  in  the  case  of  the  The 
Kingy  vs.  The  City  of  London^  (Skinner's  Rep.  310,)  held, 
that  neither  "  the  actual  possession  of  property,  nor  the  actual 
enjoyment  of  franchises,  are  of  the  essence  of  a  corporation :" 
and  this  position  has  received  the  sanction  of  Chancellor  Kent, 
in  his  valuable  commentaries.   [2  K.  C.  277,  2  ed.] 

Had  these  associations  been  authorized  in  the  very  form  they 
now  are,  but  to  carry  on  some  other  business  than  banking, 
hitherto  conducted  in  this  State  solely  by  corporations,  it.  proba- 
bly would  never  have  entered  into  the  mind  of  any  man  to  think 
they  were  corporations,  or  even  like  such  bodies,  though  his  in- 
genuity may  have  been  on  the  rack,  for  some  plausible  ground 
for  a  dilatory  defence  to  a  just  demand. 

The  Statute  must  be  considered,  as  a  modified  repeal  of  the 
Restraining  Act,  and  in  thus  repealing  it,  the  Legislature  have 
thought  proper,  and  for  the  very  best  reasons  and  most  laudable 
motives,  to  protect  the  community  from  injury,  while  they  re- 
stored to  every  citizen,  his  unquestioned  right  to  use  his  funds 
for  banking  purposes.  In  doing  this,  the  Legislature  thought  it 
judicious,  to  require  from  the  associations,  full  serai-annual 
statements  of  their  affairs;  [Section  26,  of  the  Act,]  as  the  law 
then  and  still  requires  like  annual  statements  from  the  incorpo- 
rated banks  of  this  State,  [1  R.  S.  593,  §19,  20 ;  3  R.  S.  287, 
§31 ;]  to  keep  a  certain  amount  of  specie  on  hand,  [§33,  of  the 
Act ;]  and  other  like  regulations  for  the  public  security ;  and 


49 

these  have  been  alluded  to  by  the  Counsel  for  this  defence,  as 
showing  that  the  associations  are  corporations.  With  equal 
soundness  and  cogency  might  he  argue,  that  because  a  corpora- 
tion can  maintain  a  suit  by  its  corporate  name,  and  an  individual 
can  maintain  one  by  his  name,  therefore,  a  corporation  is  an  in- 
dividual. 

One  proposition  is  self-evident,  and  although  alluded  to  here- 
tofore, should  be  distinctly  stated  in  this  place,  and  that  is  ;  if 
these  associations  are  corporations  by  reason  of  possessing  their 
essential  requisites,  they  must  have  aU  those  requisites,  what- 
ever they  are — or  in  other  words,  must  have  the  essence  of  cor- 
porations. If  there  are  four  essential  requisites,  and  they  have 
but  three  ;  or  there  are  three,  and  they  have  but  two ;  or  there 
are  two,  and  they  have  but  one  ;  they  cannot  be  corporations. 

On  the  whole,  we  insist,  that  these  associations,  judged  of  solely 
by  the  power  and  attributes  given  to  them  by  the  Statute,  do 
not  possess  the  essential  requisites  of  corporations,  and,  of  course, 
are  not  for  that  reason,  corporations. 

It  is  admitted,  as  has  already  been  stated,  that  they  are  not 
so  by  explicit  legislative  enactment — and  as  corporations  can 
only  be  created  in  one  or  the  other  of  these  modes,  the  argu- 
ment seems  conclusive. 

But  there  is  yet  another  and  controlling  argument  against 
these  associations  being  adjudged  corporations,  and  that  is  derived 
from  the  manifest  intention  of  the  Legislature. 

'  L^iSre.**^  The  first  evidence  of  that  consists,  in  not  only  the 
entire  omission  of  the  Legislature  to  declare,  by  direct  and  ex- 
plicit enactment,  that  the  associations  shall  be  corporations,  as 
they  have  done  in  every  case,  without  exception,  where  corpora- 
7 


50 

tions  have  been  created  by  special  or  general  acts;  but  in  their 
caution,  manifested  throughout  the  whole  Statute,  to  avoid  every 
expression  which  might  countenance  such  an  idea.  No  person 
can  read  this  Statute  and  hesitate  for  a  moment  in  saying,  that 
the  Legislature  never  intended  to  constitute  these  associations 
corporations.  If  they  had,  how  obvious  the  course.  They  had 
only  to  adopt  the  forms  of  some  of  our  other  general  acts  of  in- 
corporation ;  but,  instead  of  that,  they  have  studiously  avoided  all 
of  them.  There  is  a  single  provision  in  the  Law,  which  of  itself 
is  decisive  of  the  intention  of  the  Legislature.  I  allude  to  the 
clause  in  the  nineteenth  section,  that,  no  association  shall  "  be 
dissolved  by  the  death  or  insanity  of  any  of  the  shareholders 
therein".  Why  such  a  provision,  if  these  associations  are  thought, 
or  intended  to  be  corporations  ?  But  if  voluntary  associations, 
then  it  was  pertinent  and  proper;  and  like  similar  provisions 
often  introduced  into  articles  of  co-partnership  and  joint  stock 
companies,  where  there  are  numerous  members,  and  conse- 
quently frequent  deaths. 

'^^ffiute.*^  '^^®  history  of  the  origin,  progress,  and  final  pas- 
sage of  the  Statute,  also  shows,  with  unvarying  light,  the  inten- 
tion of  the  Legislature. 

It  may  not  be  time  mispent,  to  give  a  pretty  full  account  of 
this  important  Statute,  which  already  exercises  a  great,  and 
must  hereafter,  a  far  greater  influence  on  the  business,  morals, 
and  destiny  of  this  State.  By  reason  of  my  professional  con- 
nection with  one  of  the  principal  institutions  organized  under 
it,  on  a  cash  capital,  and  the  very  first  of  that  character  which 
was  organized  in  the  State,*  I  have  bestowed  great  attention  on 
this  Law,  and  feel  an  unwavering  assurance,  vastly  increased  by 
the  argument  of  this  cause,  that  it  will  confer  unnumbered  bless- 

*  I  allude  to  "  The  American  Exchange  Bank,"  estabHshed  in  the  city  of  New  York, 
the  project  of  which  was  formed  and  presented  to  the  public  by  the  Board  of  Trade  of 
thatx>ity. 


51 

ings,  not  only  on  the  people  of  this  State,  but  on  the  whole  Coun- 
try ;  that  it  will  form  an  era  in  our  legislation  and  business, 
which  will  be  remembered  and  felt  for  good,  as  long  as  the  insti- 
tutions of  the  Country  shall  stand.  [It  has  already  destroyed 
banking  monopoly,  and  purified  our  legislative  halls — of  them- 
selves a  sufficient  eulogy — but  it  furnishes  the  people  a  safe  and 
convenient  currency ;  opens  the  business  of  banking  to  fair  com- 
petition ;  encourages  industry,  commerce,  and  the  mechanic  arts, 
and  holds  them  in  steady  courses.  I  must  not,  however,  dwell 
on  these  topics,  pleasing  and  full  of  hope  and  cheering  anticipa- 
ti  on  as  they  are. 

The  project  of  a  General  Banking  Law  was  first  brought  fully 
to  the  attention  of  the  Legislature  in  1837.  During  the  session 
of  that  year,  numerous  petitions  were  presented  from  different 
parts  of  the  State,  praying  for  such  a  law. 

Mr.  Cutting,*  a  member  of  the  Assembly  that  year  from  the 
city  of  New  York,  has  the  honor  of  introducing  the  first  bill  for 
legislative  action  on  this  important  subject.  On  the  11th  Feb- 
ruary, 1837,  he  gave  notice  of  his  intention,  on  some  future  day, 
to  ask  leave  to  bring  in  a  bill,  *'  to  amend  the  act  relating- to  li- 
mited partnerships  ;"  and,  accordingly,  on  the  23d  of  that  month, 
he  introduced  a  bill,  on  leave,  entitled,  "  An  Act  in  relation  to 
limited  partnerships,  and  to  authorize  assignable  interests  there- 
in." I  have  not  seen  this  bill,  as  introduced  by  Mr.  Cutting, 
but  there  is  no  doubt  it  was  a  bill,  in  substance,  to  authorize  the 
business  of  banking.  On  the  same  day,  and  after  Mr.  Cutting 
had  introduced  his  bill,  and  after  it  had  been  read  the  first  and 
second  time,  the  Assembly  directed  their  "  committee'  on  the  in- 
corporation and  alteration  of  the  charters  of  banking  and  insur- 

*  Francis  B.  Cutting,  Esq.,  a  member  of  the  Bar  in  the  city  of  New  York.  Although 
Mr.  C.  is  vet  classed  wath  the  junior  members  of  his  profession,  he  is  rapidly  advan- 
cing in  usefulness  and  reputation,  and  must  soon  enjoy  the  highest  honors  of  the  Bar. 
He  is  ab-eady  entrusted  with  the  management  of  causes  of  the  greatest  importance, 
which  he  always  conducts  with  distinguished  ability. 


53 

ance  companies,  as  soon  as  practicable,  to  report,  for  the  action 
of  the  House,  a  general  bank  law."  On  the  3d  of  March'  fol- 
lowing, Mr.  Robinson,  from  that  committee,  reported  a  bill, 
entitled,  ''An  Act  to  authorize  associations  for  the  purposes  of 
banking."  These  two  bills  were  referred  together  to  a  com- 
mittee of  the  whole,  on  the  14th  of  that  month.  They  were 
often  before  that  committee,  until  the  22d  of  that  month,  when 
the  committee,  not  having  acted  definitively  on  the  bill  introdu- 
ced by  Mr.  Robinson,  reported  onjhat  introduced  by  Mr.  Cut- 
ting, that  they  had  amended  and  agreed  to  it.  The  House  ac- 
cepted this  report  by  a  vote  of  sixty-five  to  forty-one,  and  ordered 
the  bill  engrossed.  It  came  up  for  a  third  reading,  and  was  read 
the  third  time,  the  next  day,  when  a  motion  was  made  to  lay  it 
on  the  table,  which  carried  by  a  vote  of  sixty-six  to  forty-three. 
On  the  6th  of  April  following,  the  committee  of  the  whole  again 
took  up  the  bill  introduced  by  Mr.  Robinson,  and  after  having 
had  it  before  them  on  several  different  days,  reported  to  the 
House,  on  the  11th  of  that  month,  that  they  had  amended  and 
agreed  to  it.  The  report  Was  laid  on  the  table.  On  the  13th, 
this  bill  was  referred  to  the  Attorney-General,  "  with  instruc- 
tions to  report  his  opinion  as  to  the  constitutionality  of  the  pro- 
visions thereof;  and  also,  whether,  in  his  opinion,  the  passage  of 
the  said  bill  requires  the  assent  of  two-thirds]  of  the'  members 
elected  to  each  branch  of  the  Legislature,  to  pass  the  same  ; 
and  if,  in  his  opinion,  ariy  of  the  provisions  of  the  bilFare  un- 
constitutional, that  he  specify  in  what  respect  particularly."  On 
the"  following  day,  the  bill  introduced  by  Mr.  Cutting  was  also 
referred  to  the  Attorney-General,  with  substantially  the  same 
instructions.  He  reported  upon  both  bills  four  days  afterwards, 
viz.,  on  the  18th  of  April.  His  opinion  on  the  bill  "  to  author- 
ize associations  for  the  purpose  of  banking,"  is  more  full  than 
on  the  other,  as  in  that,  he  states  at  large  his  reasons  for  his  opin- 
ion on  both.  That  opinion  was,  that  both  bills  were  unconstitu- 
tional, and  that  each  required  a  two-thirds  vote  to  pass  it.     I 


53 

shall  hereafter  examine  fully  the  principles  and  reasons  of  his 
opinion  on  these  bills ;  but  at  present,  it  is  sufficient  to  state  the 
facts,  and  his  conclusions  upon  them. 

In  his  opinion  on  the  bill  first  referred  to  him,  he  says : 

"The  bill  referred  to  the  Attorney. General,  declares  that  asso- 
ciations for  banking,  may  be  formed  by  twenty  or  more  persons, 
*  with  the  rights  and  powers,  and  subject  to  the  conditions  and  lia- 
bilities' in  said  bill  prescribed.  (§1.)  The  capital  stock  of  the  as- 
sociation is  to  be  divided  into  shares,  and  which  shares  are  to  be 
personal  property.  (§3,31.)  It  shall  continue  for  twenty-five 
years,  and  *  be  composed  of  persons  who  shall  from  time  to  time  be 
stockholders.'  (§  4.)  It  shall  not  be  <  dissolved  by  the  death  or  act 
of  any  stockholder.'  (§  31.)  Its  concerns  are  to  be  conducted  by 
directors,  and  to  whom  the  capital  stock  is  to  be  paid.'  (§  2,  8.) 
The  *  association  shall  have  power  to  carry  on  the  business  of  bank- 
ing' in  all  its  branches,  including  '  the  issuing  of  bills,  notes  and 
other  evidences  of  debt,  and  may  exercise  such  other  incidental 
powers  as  shall  be  necessary  to  carry  on  such  business.  It  may 
make  by-laws  for  the  management  of  its  property,  the  regula- 
tion of  its  affairs,  and  for  the  transfer  of  its  stock.  (§11.)  It 
may  purchase,  hold  and  convey  real  estate  for  particular  purposes, 
and  under  particular  circumstances :  but  not  "  in  any  other  case 
or  for  any  other  purpose."  (§  12.)  It  shall  take  a  name  and  by 
which  it  must  contract,  but  it  must  sue  and  be  sued  in  the  name  of 
the  office  of  president  of  the  association,  "  without  naming  the  in- 
dividual." Suits  by  and  against  the  "  company"  are  to  be  prose- 
cuted "  in  the  same  manner  and  with  the  like  effect  as  suits  and 
proceedings  by  and  against  corporations,"  and  judgments  and  de- 
crees therein  shall  be  executed  in  the  same  manner.  (§  3,  14.) 
Officers  and  stockholders  shall  be  liable  and  answerable  in  the 
same  cases,  to  the  same  extent,  and  in  like  manner,  as  the  officers 
and  stockholders  of  incorporated  banks  created  since  the  year  1828. 
(§  15.)  The  obligations  and  contracts  of  the  association  <'  shall 
be  obligatory  on  the  association,  and  be  assignable  and  negotiable 
in  like  manner  as  if  made  or  issued  by  a  private  person.'  (§  17.) 
These  associations  are  declared  to  be  subject  to  the  provisions  of 
the  safety  fund  law  of  1829,  and  to  all  general  laws  in  force  in  re- 
lation to  incorporated  banks.  (§  27,  1,  37.)  Their  capital  is  to  be 
taxed  like  that  of  incorporated  banks,  and  the  stockholders,  are  in 
like  manner  exempt  from  taxation.     (§  34.) 

"  The  bill  was  manifestly  designed  to  confer  on  banking  associa- 
tions, which  may  be  organized  under  its  provisions,  every  essen- 
tial attribute  of  a  corporation. 


54 

*'  Every  such  association  is  to  have  succession  hy  the  name  it 
takes,  for  twenty-five  years.  It  'shall  he  composed  of  the  persons 
who  s!iall,yrom  time  to  time,  he  stockholders  in  the  same/ 

"  It  may  sue  and  he  sued,  complain  and  defend,  in  the  name  of 
the  ofiicc  of  president  of  the  association. 

♦'  It  may  hold  personal  property,  and  also  hold  and  convey  cer- 
tain real  estate,  in  the  name  it  assumes. 

"  It  may  appoint  suhordinate  officers  and  agents  to  transact  the 
business  of  the  association. 

"  It  may  make  by-laws  for  the  management  of  its  property  and 
the  regulation  of  its  affairs. 

"  It  may  enter  into  contracts,  incur  debts,  and  carry  on  the  busi- 
ness of  banking  in  all  its  branches. 

'•  It  is  taxable  like  a  monied  corporation. 

"  An  artificial  legal  person  is  thus  created.  As  a  person  it  has 
the  ordinary  rights  of  property.  It  may  enter  into  contracts,  pro- 
secute and  defend  suits,  and  do  all  other  things  contemplated  by 
the  bill,  as  a  natural  person  may. 

"  Title  to  property  and  rights  of  action,  can  vest  only  in  natural 
or  artificial  persons  :  there  is  no  intermediate  state  or  condition  in 
which  they  can  exist.  An  unincorporated  association  has  none 
of  the  attributes  or  capacities  of  a  legal  being  ;  it  cannot  sue  ;  as 
an  organized  assemblage  it  is  unknown  to  the  law.  The  individu- 
als of  which  it  is  composed,  have  rights,  but  the  association,  as 
such,  has  none."     [Assembly  Doc.  1837  :  No.  303,  pp.  5,  6,  7.] 

His  conclusions  were : 

"  1.  That  the  associations  which  this  bill  assumes  to  authorize, 
would  be  bodies  corporate  ; 

"  2.  That  as  it  thus  assumes  to  create  corporations,  it  requires 
the  assent  of  two-thirds  of  the  members  elected,  to  its  passage  ; 

"  3.  That  the  bill  is  unconstitutional,  as  it  assumes  to  author- 
ize the  creation  of  an  indefinite  and  unlimited  number  of  bodies 
corporate,  and  should  it  pass  into  a  statute,  and  associations  be 
formed  under  it,  they  would,  for  the  purposes  contemplated,  be 
absolutely  null  and  void.     [lb.  p.  9.] 

Mr.  Beardsley's  opinion  on  the  other  bill  is  more  brief.     He 

barely  states  the  contents  of  the  bill  in  detail,  shows  what  they 

are,  as  he  understands  them :  and  then,  his  two  conclusions — as 

follows : 

"  1.  That  such  partnerships  as  are  contemplated  by  the  bill 
would  be  bodies  corporate,  and  that  the  assent  of  two-thirds  of  all 


55 

the  members  elected,  is  requisite  to  the  passage  of.  a  bill  for  tlieir 
creation.  •    ' 

*♦  2.  As  the  bill  assumes  to  provide  for  the  creation  of  an  unlim- 
ited and  indefinite  number  of  these  crrporations,  at  the  mere  plea- 
sure of  individuals,  it  is  for  that  reason  unauthorized  by,  and  in  de- 
rogation  of  the  constitution."     [lb.  Doc.  No.  304,  p.  7.] 

On  the  2oth  of  April,  the  Assembly,  on  motion  of  Mr.  Rob- 
inson, "  Resolved,  that  the  General  Banking  Law,  together  with 
the  opinion  of  the  Attorney-General  thereon,  be  referred  to  a  se- 
lect committee,  to  consider  and  report  thereon."  Messrs.  Rob- 
inson, Clinch,  and  Patterson,  were  the  committee. 

On  the  29th  of  April,  that  committee,  by  Mr.  Robinson,  re- 
ported : 

"That  they  have  carefully  examined  the  different  sections  of  the 
bill  under  consideration,  and  compared  its  several  provisions  with 
the  constitutional  objections  raised  by  the  A.ttorney-General  ;  and 
have  made  such  amendments  thereto  as,  in  their  opinion,  deprives 
th?.  bill  of  those  attributes  which,  in  the  view  of  the  Attorney. Ge- 
neral, would  require  the  assent  of  two-thirds  of  the  members  elected, 
to  its  passage.  Your  committee  are  also  of  opinion,  that  the  bill, 
as  now  amended,  will  not  conflict  in  any  other  particular  with  the 
ninth  section  of  the  seventh  article  of  the  constitution  as  construed 
by  the  Attorney-General. 

"  Your  committee  have  not  deemed  it  a  necessary  part  of  their 
duty  to  investigate  the  validity  of  the  objections  raised  by  the  At- 
torney-General to  the  bill  on  which  his  opinion  was  required  ;  they 
therefore  do  not  report  any  conclusion  thereupon. 

"  The  bill,  as  amended  by  your  committee,  is  herewith  presented, 
and  this  report  respectfully  submitted."     [lb.  Doc.  No.  318.] 

This  report  was  unanimous,  having  been  signed  by  all  the 
committee. 

Two  days  afterwards,  viz.,  on  the  first  day  of  May,  the  House 
went  into  committee  of  the  whole  on  the  bill,  amended  it,  as  re- 
commended by  the  committee,  and  agreed  to  it;  and  the  report 
of  the  committee  was  accepted  by  a  vote  of  forty-nine  to  twenty- 
six,  and  the  bill  ordered  to  be  engrossed.  It  was  read  the  third 
time  the  next  day,  and  referred  to  the  Committee  on  two-thirds 


56 

bills,  to  consider  and  report  upon  it.  That  committee  reported 
the  day  following,  that,  in  their  opinion,  it  was  not  a  two-thirds 
bill,  and  it  was  ordered  to  a  third  reading,  passed,  and  sent  to 
the  Senate. 

Some  very  early  movements,  of  a  general  character,  \vere  made 
in  the  Senate  in  1837,  on  the  subject  of  a  general  banking  law. 

On  the  20th  of  January,  Mr.  Loomis,  a  Senator  from  the 
Seventh  District,  offered  a  resolution,  "  That  the  committee  of 
the  whole  be  discharged  from  the  further  consideration  of  the 
petition  praying  for  the  passage  of  a  law  authorizing  a  general 
system  of  banking  within  this  State ;  and  that  the  said  petition 
be  referred  to^a  select  committee,  to  consist  of  one  Senator  from 
each  Senate  District,  with  instructions  to  report  a  bill  for  that 
purpose.''  On  the  same  day,  Mr.  Dickinson,  a  Senator  from  the 
Sixth  District,  offered  a  resolution,  "  that  the  committee  on  banks 
and  insurance  companies,  be  instructed  to  inquire  into  the  ex- 
pediency of  passing  a  general  banking  law,"  to  contain  certain 
principles  and  provisions,  which  were  specified  in  the  resolution, 
of  rather  an  ultra  character.  This  resolution  was  laid  on  the 
table,  and  does  not  appear  to  have  been  called  up  afterwards. 

On  the  27th  of  January,  the  Senate  took  up  the  resolution 
offered  by  Mr.  Loomis,  passed  it,  after  striking  out  the  instruc- 
tions, and  appointed  a  committee  under  it,  consisting  of  Mr. 
Loomis,  Mr.  Young,  from  the  Fourth  District ;  Mr.  Hunting- 
ton, from  the  Sixth  ;  Mr.  Tracy,  from  the  Eighth  ;  Mr.  Sterling, 
from  the  Fifth ;  Mr.  Livingston,  from  the  First ;  Mr.  Johnson, 
from  the  Third ;  and  Mr.  Van  Dyck,  from  the  Second. 

This  committee  reported  by  Mr.  Young,  on  the  18th  of  April 
following ;  at  which  time,  the  Assembly  were  engaged  almost 
daily  upon  the  two  bills  before  it,  on  the  same  subject.  The  re- 
port is  full,  on  the  whole  subject  of  banking,  and  shows  that  the 


57 

committee  had  given  it  great  attention.  With  their  report,  the 
committee  presented  a  bill,  ''  to  authorize  associations  for  the 
purposes  of  banking." 

A  few  extracts  from  this  able  report,  will  exhibit  the  views 
of  the  friends  of  the  measure  in  the  Senate, 

"  The  committee  feel  themselves  called  upon,  under  the  reference 
which  has  been  made  to  them,  to  allude  to  the  origin  of  the  pre* 
sent  system  of  bank  corporations,  and  to  point  out  some  of  the 
most  prominent  evils  which  are  necessarily  connected  with  the 
monopoly  character  of  those  institutions. 

"  These  evils  have  been  experienced  by  the  community  for  many 
years ;  and  the  time  seems  to  have  arrived,  when  it  is  proper  to 
devise,  if  possible,  a  system  which  is  more  free  and  more  equal  in 
its  operation  ;  and  which,  unshackled  by  useless  restraints,  and 
unprotected  by  chartered  privileges,  shall  permit  the  flow  of  a  cir- 
culating medium  through  all  parts  of  the  State,  as  the  exigencies 
of  trade  and  the  pulsations  of  business  require.  [Sen.  Doc.  No.  55, 
1837,  p.  1.] 

"  But  however  onerous  the  exactions  wl.ich  monopolies  ever  im- 
pose, there  are  other  objections  to  the  system  of  a  more  formidable 
character,  some  of  which  are  inseparable  from  it,  and  put  all  pal- 
liation at  defianc3.  The  provision  in  the  Constitution,  requiring 
two-thirds  for  the  passage  of  a  bill  creating  a  corporation,  adds  to 
the  difficulty  of  procuring  a  charter.  This  difficulty  can  be  ob- 
viated only  by  securing,  in  both  houses,  the  requisite  number  of 
votes.  Applicants  for  bank  charters,  are  thus  induced  to  ascertain 
all  the  projects  that  are  pending,  to  cultivate  an  alliance  with  each 
other,  and  to  make  themselves  acquainted,  if  possible,  with  every 
member  who  is  charged  with  any  favorite  topic  of  legislation.  A 
reciprocation  of  mutual  aid  is  the  necessary  consequence.  A 
league  of  interest  is  thus  formed,  strengthened  and  cemented  by 
the  most  mercenary  motives  ;  and  the  inmates  of  the  temple  of  le- 
gislation are  thus  converted  into  vile  *  money  changers.*  [lb.  p  3.] 
**  Like  the  leprosy,  the  monopoly  system,  from  a  single  spot,  has 
increased  and  spread  itself  over  the  whole  body  politic.  There  are 
now  in  operation  in  this  State,  one  hundred  banks,  including  two 
branches,  with  which  no  citizen,  or  association  of  citizens,  is  allow- 
ed by  our  laws  to  compete.     [lb.  p.  6.] 

"The  system  of  joint-stock  banking,  by  private  associations,  has 
been  successfully  conducted  in  Scotland,  on  a  scale  regulated  alone 
by  competition,  and  by  demand  and  supply,  for  more  than  one  hun- 
dred years,  without  a  single  failure  in  the  whole  of  that  period  up 
to  the  present  time."  [lb.  p.  13.] 
8 


58 

Speaking  of  the  evils  of  an  inflated  currency,  the  Committee 
propose,  as  one  remedy  for  them,  "  subjecting  the  issue  of  such 
bank  paper  as  is  authorized  by  law,  to  full,  free  and  open  com- 
petition,'^ 

"  On  this  second  topic,"  say  the  committee,  "  which  is  the  only 
one  with  which  the  committee  are  specially  charged,  they  earnestly 
recommend  the  organization  of  a  system  of  private  banking  asso- 
ciations, which  shall  be  wholly  unconnected  with  each  other,  so 
that  they  may  freely  compete  among  themselves,  as  well  as  with 
the  existing  bank  corporations,    [lb.  p.  18.] 

"The  committee  have  prepared  a  bill,  combining  in  a  detailed 
form,  the  foregoing  suggestions,  which  their  chairman  will  ask  leave 
to  introduce."     [lb.  p.  20.] 

An  effort  was  made  by  Mr.  Young,  for  the  Senate  to  take  up 
this  bill  on  the  27th  of  March,  but  it  failed  by  a  vote  of  twenty 
to  eight.  It  was  occasionally  before  the  Senate,  in  committee  of 
the  whole,  during  the  month  of  April,  and,  as  I  understand,  was 
fully  discussed :  but  on  the  5th  of  May,  the  Senate  rejected  it 
by  a  vote  of  fifteen  to  ten ;  and  on  the  same  day,  rejected  the 
bill  from  the  Assembly,  by  a  vote  of  sixteen  to  nine. 

Thus  the  measure  was  defeated  for  the  present,  though  it  num- 
bered among  its  real  friends,  many  of  the  most  intelligent  and 
influential  members  of  the  Legislature,  and  was  loudly  and  ge- 
nerally called  for  by  the  people. 

Their  voice  was  at  last,  not  only  heard,  but  regarded  ; — and 
the  measure  appeared  before  the  Legislature  of  1838,  in  a  more 
imposing  form.  Gov.  Marcy  recommended  it  explicitly  and  ear- 
nestly, in  his  message  of  that  year,  to  the  Legislature. 

Before  I  proceed,  however,.to  the  occurrences  of  1838,  let  me 
call  attention  to  the  particular  matter  now  in  hand,  viz.,  the  in- 
tention of  the  Legislature  in  respect  to  creating  corporations y  to 
carry  out  this  measure  of  general  banking. 


59 

The  report  of  the  Committee  of  the  Senate,  clearly  exhibits 
the  views  of  that  branch  of  the  Legislature  on  this  subject.  In- 
stead of  increasing  corporations,  it  is  obvious  that  one  of  the 
leading  motives,  if  not  the  leading  one,  of  the  friends  of  the 
measure  in  that  House,  was  to  curtail,  restrain  and  regulate  the 
banking  corporations  already  existing,  and  prevent  the  creation 
of  any  more. 

The  Assembly  had  evidently  framed  both  their  bills  in  such 
form  as,  in  their  opinion,  would  not  render  them  obnoxious  to 
the  charge,  that  they  were  bills  to  create  corporations ;  and  the 
Attorney-General,  to  whom  they  were  referred,  is  obliged  to  re- 
sort to  a  close  argument,  particularly  in  respect  to  the  bill  intro- 
duced by  Mr.  Cutting,  to  prove  that  the  associations  which  they 
authorized  were  in  fact  corporations,  though  not  declared  to  be 
so  by  the  bills.  Instead  of  passing  the  bill,  "  to  authorize  asso- 
ciations for  the  purposes  of  banking,"  which,  it  appears,  at  last 
they  preferred,  of  the  two,  the  Assembly  sent  it  to  a  special  com- 
mittee, amended  it,  so  as  to  remove  the  grounds  of  the  Attorney- 
General's  objections,  and  passed  it,  under  a  report  from  their 
standing  committee  on  two-thirds  bills,  that  it  was  not  one  of  that 
class.  From  these  facts,  the  inference  is  irresistible,  that  the 
Assembly  intended  the  very  opposite  of  creating  corporations  to 
conduct  the  business  of  banking. 

W  In  this  aspect,  the  measure  was  presented  to  the  mind  of  Go- 
vernor Marcy,  when  preparing  his  message  for  1838  ;  and  he 
expresses  his  views  on  the  whole  subject.  As  his  message  will 
be  frequently  referred  to  in  the  course  of  the  argument,  I  will 
here  give  all  he  says  on  the  subject : 

"  While  the  Legislature  has  been  engaged  in  giving  to  these  in- 
stitutions  the  attributes  of  permanency  and  usefulnees,  an  increas- 
ing unfriendliness  has  been  exhibited  towards  them  principally  on 
account  of  their  exclusive  privileges. ^Monopolies  are  andoubtedly 


60 

incompatible  with  the  equality  of  civil  rights,  which  it  is  the  great 
object  of  a  free  government  to  secure  to  all  its  citizens.  Although 
the  banks  of  this  State  are  not  strictl.  monopolies,  yet  they  possess 
privileges  withheld  from  individuals,  and  in  consequence  thereof 
have  hitherto  shared,  and  will  probably  continue  to  share,  in  the 
odiousness  with  which  monopolies  are  justly  regarded.  To  obviate 
this  objection,  it  is  desirable  to  discontinue  the  present  mode  of 
granting  charters,  and  to  open  the  business  of  banking  to  a  full  and 
free  competition,  under  such  general  restrictions  and  regulations  as 
are  necessary  to  insure  to  the  public  at  large  a  sound  currency. 
This  can  be  done,  either  by  passing  a  general  banking  law,  or  by 
an  entire  repeal  of  the  restraining  act.  Doubts  have  been  enter- 
tained as  to  the  constitutional  competency  of  the  Legislature  to 
pass  a  General  Banking  Law,  conferring  corporate  powers.  With- 
out entering  into  the  argument  on  this  question,  I  will  only  say,  that 
I  am  inclined  to  the  opinion  that  the  Legislature  have  the  power  to 
paso  such  a  law ;  but  the  spirit  of  the  Constitution  requires  that  it 
should  be  passed  as  a  two-thirds  bill.  It  is  proper  that  I  should  also 
say,  that  this  opinion  is  entertained  with  much  diffidence,  and  is 
not  expressed  without  duly  considering  the  respectful  deference  just- 
ly due  to  the  high  authority  by  which  it  is  opposed.  If,  how- 
ever, you  should  conclude  that  the  constitution  interposes  an  insur- 
mountable obstacle  to  the  passage  of  such  an  act,  then  it  is  sug- 
gested that  you  should  regulate  and  limit,  by  a  general  law,  partner- 
ships which  may  be  forn  ed  to  conduct  the  business  of  banking,  in 
such  a  manner  as  to  secure  to  them  the  essential  advantages  now 
conferred  by  special  charters,  and  subject  them  to  such  restric- 
tions and  regulations  as  the  public  good  may  require. 

"  In  recommending  to  the  last  Legislature  a  repeal  of  the  restrain- 
ing law,  I  felt  it  to  be  my  duty  to  urge  them  to  retain  that  part  of 
it  which  prohibits  the  issue  of  notes  or  other  evidences  of  debt  to  be 
put  in  circulation  as  money.  The  objections  I  then  entertained  to 
an  unqualified  repeal  still  have  great  force  with  me.  I  fear  the  in- 
jurious consequences  to  our  currency  that  would  result  from  grant- 
ing to  individuals  and  associations  the  unrestrained  license  to  issue 
paper,  and  put  into  common  use  as  a  circulating  medium ;  but  if 
this  permission  could  be  made  to  depend  on  an  ample  fund  to  be 
provided  for  the  redemption  of  the  paper  which  might  be  put  in  cir- 
culation— if  the  issues  could  be  graduated  by  the  amount  of  this 
fund ;  and  if  it  could  be  certainly  and  immediately  available  when- 
ever required  for  the  purpose  of  redemptiom,  the  objections  to  an 
unqualified  repeal  of  the  restraining  law  would  be  removed."  [As- 
sembly Doc.  1838,  No.  2,  pp.  7,  8.] 

Here  is  presented  for  the  first,  so  far  as  I  have  observed,  the 
Taluable  feature  of  our  General  Banking  Law,  which  provides 


61 

a  safe  and  ample  fund  to  secure  the  currency  which  it  authorizes. 
With  this  addition,  the  plan  recommended  by  the  Governor  is  the 
same,  substantially,  as  the  one  adopted  by  the  Assembly  the  year 
before. 

The  Senate  this  year  originated  no  bill  on  the  subject ;  but 
awaited  the  action  of  the  other  House.  All  they  did,  till  a  late 
day  in  the  session,  was  to  appoint  a  committee  on  this  part  of  the 
Governor's  message,  which  consisted  of  Mr.  Young,  Mr.  Willes, 
and  Mr.  Lacy. 

The  Assembly  took  up  the  measure  in  earnest  and  with  spirit. 
They  appointed  a  committee  of  five,  as  early  as  the  6th  of  Jan- 
uary, on  so  much  of  the  Governor's  message  as  related  to  the 
restraining  laws  and  a  general  banking  law,  consisting  of 
Mr.  J.  Miller,  Mr.  G.  W.  Patterson,  Mr.  Bostwick,  Mr.  Nellis 
and  Mr.  Wallace.* 

Mr,  Patterson,  from  this  committee,  reported  on  the  3d  Feb- 
ruary, and  presented  a  bill,  "  to  authorize  associations  to  carry 
on  the  business  of  banking."  The  committee  disclaim  an  inten- 
tion to  discuss  at  large  the  subject  of  currency  and  banking, 
but  give,  in  a  brief  report,  filled  with  good  sense,  the  principal 
reasons  in  favor  of  the  bill.     A  few  extracts  will  suffice  : 

"  The  system  of  banking,  as  at  present  established  in  this  State, 
under  the  provisions  of  the  safety  fund  law,  is  considered  by  many 
as  a  monopoly,  and  as  such,  has  beconne  odious  to  a  large  class  of 
our  fellow- citizens ;"  *  *  *  *  "it  cannot  be  de- 
nied, that  a  privilege  is  enjoyed  by  the  few,  which  the  great  body 
of  the  people  do  not,  and,  under  the  existing  laws,  cannot  enjoy." 
"  By  throwing  open  the  business  of  banking  to  all  who  will  give  the 
bill-holder  the  necessary  security,  the  jealousies  now  existing,  will, 
in  a  great  measure,  be  overcome,  and  capitalists  will  seek  invest- 

♦  Mr.  Jedediah  Miller,  of  Schoharie  ;  George  W.  Patterson,  of  Livingston ;  William 
F.  Bostwick,  of  Madison ;  Jeremiah  Nellis,  of  Montgomery  and  Hamilton  ;  and  James 
Wallace,  of  Rensselaer. 


63 

ment  for  their  capital  where  it  can  be  most  profitably  employed ; 
and  thus  the  business  of  banking  will  be  rendered  secure  to  the  pub- 
lie,  and  the  competition  sufficient  to  afford  to  the  borrower,  all  the 
accommodations  he  can  reasonably  desire." 

"  The  committee  are  well  aware  of  the  objections  urged  by  the 
Attorney-General  against  the  constitutionality  of  a  bill  for  a  general 
banking  law  that  was  before  the  last  House  of  Assembly  ;  but  the 
committee,  without  attempting  to  decide  whether  the  opinion  of  the 
Attorney. General  was  well  founded  or  otherwise,  know  that  many 
eminent  individuals  of  the  legal  profession  are  clearly  of  opinion 
that  the  bill  above  referred  to  was  constitutional,  and  might  have 
become  a  law  with  the  assent  of  a  majority  of  the  Legislature  ;  still 
in  preparing  a  bill  for  the  consideration  of  the  House,  the  commit- 
tee have  studiously  avoided  every  thing  that  would  constitute  asso- 
ciations  to  be  formed  under  its  provisions,  corporations^  and  they 
therefore  think  the  constitutional  objection  cannot,  with  any  pro- 
priety, be  raised."     [Assembly  Doc.  1838,  No  122,  p.  3.] 

The  Assembly  took  up  this  bill,  in  committee  of  the  whole, 
on  the  14th  of  February,  and  were  engaged  almost  daily  upon 
it  until  the  28th  of  that  month,  when,  on  motion  of  Mr.  Ogden, 
the  committee  of  the  whole  were  discharged  from  the  bill,  and 
it  was  referred  to  a  select  committee  of  nine.  That  committee 
consisted  of  Mr.  G.  W.  Patterson,  Mr.  Ogden,  Mr.  J.  Miller, 
Mr.  Barnard,  Mr.  Ruggles,  Mr.  Mann,  Mr.  Kurd,  Mr.  Culver 
and  Mr.  Hoard.* 

*  This  was,  in  many  respects,  a  remarkable  committee.  Mr.  Patterson  and  Mr. 
Miller  were  on  the  committee  who  reported  the  bill.  The  other  gentlemen  were  Mr. 
David  B,  Ogden,  of  the  City  of  New  York;  Daniel  D.  Barnard,  of  the  City  of  Albany; 
Samuel  B.  Ruggles,  of  the  City  of  New  York;  Abijah  Mann,  jun.,  of  Herkimer;  Da- 
vis Hurd,  of  Niagara;  Erastus  D.  Culver,  of  Washington;  and  Charles  B.  Hoard,  of 
Jefferson. 

Mr.  Patterson,  the  Chairman,  had  already  distinguished  himself  as  a  friend  of  the 
measure.  He  was  in  the  Assembly  the  year  before,  as  we  have  seen,  and  one  of  the 
Select  Committee  to  whom  was  referred  the  bill  of  that  year,  with  the  opinion  of  the 
Attorney  General  thereon.  He  aided  in  stripping  it  of  all  corporale  attributes.  He 
read,  and  doubtless  wrote,  the  sensible  report  of  1838,  from  which  extracts  have  been 
given.  A  mechanic  by  trade,  he  is  self-educated,  and  the  builder  of  his  own  fortime. 
Although  hardly  yet,  1  should  suppose,  in  middle  age,  he  is  the  Speaker  of  the  As- 
sembly for  the  present  year,  and  lately  was  selected  from  a  body  of  four  hundred  of 
the  most  respectable  citizens  of  this  State  to  preside  over  their  deliberations,  in  a  con- 
vention, held  at  Ithaca,  to  promote  the  construction  of  the  New  York  and  Erie  Rail- 
road. He  is  a  striking  instance  of  the  fostering  influence  of  our  institutions,  in  elevat- 
ing to  distinction  and  usefulness,  natural  talents  and  worth,  It  is  to  be  hoped,  that  the 
pubhc  will  continue  to  enjoy  the  benefit  of  his  services. 

David  B.  Ogden,  who  moved  the  appointment  of  this  committee,  and  of  course, 
by  parliamentary  etiquette,  entitled  to  be  its  chairman,  I  venture  to  say  from  my 
knowledge  of  the  generosity  of  his  nature,  though  I  know  nothing  of  the  fact,  gave 


63 

A  committee  could  scarcely  have  been  formed,  with  the  whole 
State  to  select  from,  better  qualified  and  assorted  for  the  duty 
assigned  them. 

On  the  10th  of  March  following,  the  committee  reported,  by 

way,  and  requested  that  Mr.  Patterson  should  fill  that  place,  A  note  like  this,  were 
the  time  and  occasion  proper,  could  not  even  approach  a  just  notice  of  the  character 
of  this  truly  distinguished  gentleman. 

He  is  well  know  n,  not  only  in  this  State,  but  the  United  States.  He  has  for  many 
years  stood  near,  if  not  at  the  ver>-  head,  of  the  Bar  of  this  State,  and  in  the  very  first 
rank  of  the  Bar  of  the  United  States.  His  practice  has  been  principally  in  the  Su- 
preme Court  of  the  U.  S.,  for  several  years,  and  he  is  the  only  member  of  our  Bar,  who 
attends  regularly  the  sessions  of  that  Court  at  Washington.  His  professional  engage- 
ments have  directed  his  attention  particularly  to  constitutional  questions,  and  he  may 
jusdy  be  considered,  the  constilutional  lawyer  of  this  State.  Of  all  the  men  in  the 
State,  who  could  have  been  selected,  for  the  revision  and  construction  of  such  a  bill 
as  our  General  Banking  Law,  none  could  have  been  found  better  qualified  than  Mr. 
Ogden.  It  was  most  fortunate,  that  we  had  his  services  that  year  in  our  Legislature. 
He  approved  of  the  Statute,  and  it  has,  consequently,  the  full  sanction  of  his  deliber- 
ate judgment. 

Daniel  D.  Barnard.  This  gentleman  is  also  well  known  in  this  State,  by  severed 
forensic  efforts,  of  great  beauty  and  power,  in  our  higher  courts,  and  by  numerous  lite- 
rary addresses  and  other  classical  publications,  which  display  ripe  scholarship,  and  a 
highly  cultivated  taste. 

Mr.  Barnard  is  also  distinguished  for  his  political  services  and  paj>ers.  He  was  a 
Representative  in  Congress  from  this  State  some  years  since,  and  is  also  a  Represen- 
tative, in  the  present  Congress,  of  the  District,  in  which  he  resides.  The  Assembly 
of  1838  committed  the  important  subject  of  the  surplus  revenue  and  public  instruc- 
tion to  a  select  committee,  of  which  he  was  chairman,  and  during  the  session,  received 
from  him  a  report,  which  was  universally  admired,  and  greatly  added  to  the  high  re- 
putation he  already  enjoyed,  for  correct  scholarship,  and  liberal  and  enlightened  viewa 
on  the  subject  of  education.  He  took  an  active  part  in  all  the  debates  in  the  Assem- 
bly, on  the  General  Bankinsr  Law. 

Samuel  B.  Ruggles.  Few  gentlemen,  of  Mr-  Ruggles'  age,  have  a  higher  reptt- 
tation,  or  enjoy  more  fully  the  pubUc  confidence.  His  report  on  the  financial  resour- 
ces of  this  ^tate,  made  to  the  Assembly  of  1838,  as  chairman  of  their  committee  of 
ways  and  means,  has  deservedly  given  him  an  enviable  fame,  in  this  Country  and 
Europe.  He  is  now  one  of  our  Canal  Commissioners,  and  has  charge  of  one  of  our 
most  diflJcult  and  important  public  works-  Though  several  years  short  of  the  fiill  ma- 
turity of  middle  age,  it  was  dehghtful  to  observe  the  general  satisfaction  which  waa 
expressed,  on  his  appointment  to  his  present  oflice.  That  appointment  was  singularly 
honorable  to  him  He  supphed  the  place  left  vacant  by  the  death  of  the  Hon.  Ste- 
phen Van  Rensselaer.  And  this  honor  was  not  the  humiliating  and  hard-earned  re- 
ward of  political  management,  but  the  spontaneous  offering  of  a  grateful  community. 

He  was  an  ardent  and  persevering  friend  of  the  General  Banking  Law,  and  he  and 
his  friends  have  taken  large  pecuniary  interests  in  several  o(  the  associations,  but  prin- 
cipally in  the  Bank  of  Commerce.  His  views  of  banking  and  finance,  are  admitted  to 
be  enlarged  and  sound,  and  to  him  the  Public  are  greatly  indebted,  for  the  Uberal  and 
enhghtened  provisions  of  that  Statute. 

Mr.  R.  is,  besides,  a  well  educated  and  good  lawyer.  Though  not  distinguished  as 
an  advocate,  he  deservedly  commanded  a  large  practice  while  engaged  in  his  profes- 
sion. His  professional  opinions  were  always  treated  with  great  respect,  and  received 
their  full  share  of  confidence.  This  State  has  good  right  to  expect  valuable  services 
from  such  an  officer. 

Abijah  Mann,  Junior.  There  is  not,  probably,  a  gentleman  in  this  State  more 
familiar  with  our  legislation  than  Mr.  Mann.  He  has  been  many  years  hi  the  Assem- 
bly, and  once,  certainly,  if  not  oftener,  a  Representative  in  Congress.  He  has  en- 
joyed the  confidence  of  his  political  friends  for  a  Icoig  time,  and  received  maoy  evi- 
dences of  their  approbation. 


64 

their  chairman,  that  they  had  gone  through  the  bill,  amended, 
and  agreed  to  it.  It  was  then  committed  to  the  committee  of  the 
whole,  and  restored  to  its  former  place  in  the  order  of  business. 
Four  days  afterwards,  the  committee  of  the  whole  took  it  up,  and 
were  engaged  nearly  every  day  upon  it  until  the  third  of  April 
following,  when  they  reported  to  the  House,  that  they  had  gone 
through  the  bill,  amended  it,  altered  its  title,  to  "  An  Act  to  au- 
thorize the  business  of  banking,"  (the  one  it  now  bears,)  and 
agreed  to  it.  The  House  then  took  up  the  bill  by  sections,  and 
adopted  them  separately,  after  amending  two  or  three  of  them, 
and  at  last  approved  the  whole  bill,  by  a  vote  of  seventy-nine  to 
twenty-two,  and  ordered  it  engrossed  for  a  third  reading.  On 
the  fifth  of  April,  it  came  from  the  committee  on  engrossed  bills, 
and  was  passed  by  a  vote  of  eighty-six  to  twenty-nine,  and  sent 
to  the  Senate. 


As  the  Assembly  of  1838,  is  admitted  by  all,  to  have  possess- 
ed an  unusual  amount  of  talent  and  moral  worth,  and  especially 
of  juridical  talent,  it  seems  proper  that  this  Court  should  know, 
what  gentlemen,  in  that  House,  and  particularly  the  profession, 
gave  their  sanction  under  oath  to  this  bill.  They  were  the  fol- 
lowing : 

Edmund  Raynsford, 
Seth  H.  Pratt, 
Samuel  Russel, 
James  Stoddard, 
Isaac  S.  Miller, 
Henry  R.  Filley, 
Nathan  G.  Morgan, 
Abner  Lewis, 
George  A.  French, 
Thomas  I.  Allen, 
Hiram  White, 
Henry  Balcom, 
Justus  Parce, 
William  H.  Toby, 
William  A.  Dean, 
Abraham  Bain, 


Albany, 
Allegany, 

John  Osgood, 
David  Mathews, 

Cortland, 
do. 

do. 

Cornelius  Dubois, 

Dutchess, 

Broome, 

Lewis  F.  Allen, 

Erie, 

Cayuga, 
do. 

Cyrenus  Wilbur, 
Asa  Warren, 

do. 
do. 

do. 

Gideon  Hammond, 

Essex, 

Chautauque 
do. 

,  Luther  Bradish, 
John  Head, 

Franklin, 
Genesee, 

do. 

Andrew  H.  Green, 

do. 

Chemung, 
Chenango, 
do. 

Thomas  B.  Cooke, 
Peter  Hubbell, 
Daniel  Wardwell, 

Green, 

do. 
Jefferson, 

Columbia, 
do. 

Benj.  D.  Silliman, 
Cornelius  Bergen, 

Kings, 

do.       . 

Geo.  W.  Patterson, 

Livingston, 

65 


Azariah  Smith,  Onondaga, 

HeDry  W.  Taylor,    Ontario, 
Jonathan  Buell,  do. 

David  Hudson,  do. 

Hudson  M'Farlan,    Orange, 
Goldsmith  Denniston,   do. 
Stephen  W.  Fullerton,  do. 
Horatio  Reed,  Orleans, 

Arvin  Rice,  Oswego, 

John  M.  Richardson,    do. 


Queens, 
Rensselaer, 

do. 
Richmond, 
Rockland, 
Saratoga, 


Schoharie, 
Seneca, 
Tioga, 
Tompkins, 


William  Scott,         Livingston, 
Wm.  F.  Bostwick,  Madison, 
Oncsimus  Mead,  do. 

William  Lord,  do. 

John  P.  Patterson,   Monroe, 
Ezra  Sheldon,  jun.        do. 

Marcellus  Weston,  f  <»''^<«"f  ^ 
&  Hamilton, 
Abraham  V.  Putman,     do. 
Jeremiah  Nellis,  do. 

David  B.  Ogden,      New  Yorh 
John  I.  Labagh,  do. 

Adoniram  Chandler,      do. 
Willis  Hall,  do. 

Alfred  Carhart,  do. 

John  B.  Scoles,  do. 

Garret  H.  Stryker,        do. 
Evan  Griffith,  do. 

Heman  W.  Childs,        do. 
Anson  Willis,  do. 

Samuel  B.  Ruggles,       do. 
David  Hurd,  Niagara, 

Peter  B.  Porter,  jun.       do. 
Russell  Fuller,  Oneida, 

Fortune  C.  White,        do. 
Henry  Hearsey,  do. 

Phares  Gould,  Onondaga, 

James  R.  Lawrence,      do. 

The  Senate  received  this  bill  from  the  Assembly,  on  the  16th 
of  April,  and  read  it  a  first  and  second  time. 

Three  days  afterwards,  viz.,  on  the  9th  of  April,  Mr.  Young, 
from  *'  the  select  committee,  to  which  was  referred  that  part  of 
the  Governor's  message  which  relates  to  the  repeal  of  the  re- 
straining law^  and  the  introduction  of  free  competition  in  the 
business  of  banking,^^  made  an  elaborate  report,  which  is  prin- 
cipally occupied  with  a  history  of  the  fluctuations  of  trade  in 
England  and  this  Country,  and  a  discussion  of  the  elementary 
principles  of  currency.*  A  few  quotations  from  it  will  answer 
the  purposes  of  this  argument. 

*  This  report  is  written  with  great  spirit  and  force ;  and  exhibits  extensive  research, 
and  a  familiar  acquaintance  wiQi  the  subjects  treated;  but  the  imagination  of  Senator 

9 


John  A.  King, 

Hezekiah  Hull, 

Jacob  A.  Tenyck, 

Israel  Oakley, 

David  Clark, 

Calvin  Wheeler, 

Walter  Van  Veghten,  do. 

Silas  H.  Marsh,        Schenctady, 

Mitchell  Sanford, 

Nathan  Wakeman, 

John  Coryell, 

Robert  Swartwout, 

Benjamin  R.  Bevier,  Ulster, 

Esbon  Blackman,     Wayne, 

Nicholas  Cruger,      Westchester, 

Francis  Barretto,  do. 

Niles  Benham,  Yates, 


After  referring  to  the  report  of  the  committee  of  the  Senate, 
made  the  previous  year,  on  the  subject  of  a  general  system  of 
private  banking,  and,  adopting  the  opinions  of  that  report,  the 
committee  say : 

"The  subject  of  free  competition  in  banking  has,  for  some  time 
past,  very  much  occupied  the  pubUc  mind."  [Senate  Doc.  1838, 
No.  68,  p.  2.] 

"Impressed  by  the  current  of  the  public  will,  the  Governor  has 
recommended  to  the  Legislature,  *  to  discontinue  the  present  mode 
of  granting  charters,  and  to  open  the  business  of  banking  to  a  fuU 
and  free  competition,  under  such  general  restrictions  and  regula- 
tions, as  are  necessary  to  ensure  to  the  public  at  large,  a  sound  cur- 
ency.'"     [lb.] 

In  conclusion,  they  say  : 

"  The  security,  responsibility,  checks  and  restraints  which  ought 
to  be  imposed  upon  banking  associations,  are  indicated  in  the  report 
to  which  reference  has  been  made,  and  need  not  be  repeated.  '*  [lb. 
p.  39.] 

The  Senate  took  up  the  bill,  in  committee  of  the  whole,  on 
the  16th  of  April,  and  again  on  the  I7th,  when  it  was  reported 
to  the  Senate,  with  amendments.  The  Senate  then  proceeded 
to  consider  and  determine  several  other  amendments,  offered  by 
different  Senators,  all  of  which  failed,  except  one  offered  by 
Senator  Beckwith,  which  was  to  add  a  new  section  at  the  end 
of  the  bill,  in  substance  the  same  as  the  present  thirty-third  sec- 
tion, except  fixing  the  specie  basis  of  circulation  at  fifteen^  in- 
stead of  twelve  and  one-half  ^qx  cent.,  as  it  now  is. 

Thus  amended,  the  bill  was  approved,  and  ordered  to  a  third 
reading,  by  a  vote  of  twenty-four  to  eight.  It  was  read  the 
third  time  the  same  day,  and  after  being  so  read.  Senator  Pow- 
ers offered  a  resolution,  that  it  required  a  two- thirds  vote  to  pass 
it.  This  resolution  was  decided  in  the  negative,  by  a  vote  of 
seventeen  to  ten.     The  bill,  when  this  vote  was  taken,  was  the 

Young  was,  evidently,  greatly  excited  on  iliose  subjects,  when  he  wrote  it.    His  views 
are  certainly  too  extravagant  and  ultra  for  the  practical  wisdom  of  the  present  day. 


same  precisely,  as  the  Law  now  is,  except  the  difference  men- 
tioned in  the  amount  of  the  specie  basis ;  for  the  Assembly,  as 
we  shall  soon  see,  adopted  all  the  amendments  of  the  Senate, 
except  the  new  section  respecting  the  specie  basis,  and  finally 
agreed  to  that,  modified  as  to  the  amount  of  the  per  cent.,  as  it 
now  stands. 

Hence,  the  vote  of  the  Senate,  was  the  expression  of  the  di- 
rect opinions  of  the  Senators  upon,  not  only  the  general  ques- 
tion of  the  constitutionality  of  the  Statute,  but  upon  the  question, 
whether  the  associations  were  corporations. 

The  Senators  who  thus  gave  their  solemn  opinions  in  favor  of 
the  constitutionality  of  this  Law,  were  : 

Frederick  A.  Talmadge,  1st  DisLhaurena  Hull,  6th  District, 

Gulian  C.  Verplanck,  do.     Chester  Loomis,  1th  District, 

Henry  A.  Livingston,  2d  District,John  Beardsley,  "       " 

David  Spraker,  4:th    do.       Samuel  L.  Edwards,    "       " 

Samuel  Young,  "       »         John  Maynard,  "       " 

Martin  Lee,  "       "         Isaac  Lacy,  &th  District, 

Micah  Sterling,  5th     "         Samuel  Works,  "       " 

Levi  Beardsley,  6th     "         William  A.  Moseley.    "       " 

Daniel  S.  Dickinson,  "       " 

On  the  same  day  the  Senate  passed  the  bill  by  a  vote  of  twen- 
ty to  eight.  All  the  Senators  who  expressed  opinions  in  favor 
of  the  constitutionality  of  the  bill,  and  that  it  was  not  a  two-thirds 
bill,  voted  for  it  on  its  final  passage,  except  Senator  Young ; 
and  three  of  those,  who  were  of  opinion  that  it  was  a  two-thirds 
bill ;  viz.,  Coe  S.  Downing,  from  the  First  District ;  John  P. 
Jones,  from  the  Second ;  and  Edward  P.  Livingston,  from  the 
Third ;  voted  for  it  on  its  final  passage ;  as  did  also,  Henry  A. 
Van  Dyck,  from  the  Second  District,  who  did  not  vote  on  the 
other  question. 

The  bill  was  sent  the  same  day,  viz.,  the  17th  of  April,  to  the 
Asesmbly,  who  referred  it  and  the  amendments  of  the  Senate,  to 


68 

a  special  committee,  of  which  Mr.  Patterson  was  chairman,  who 
the  next  day  reported,  and  recommended,  that  the  Assembly 
agree  to  all  the  amendments  of  the  Senate,  except  the  one  re- 
specting the  specie  basis ;  which  was  accordingly  done.  The 
Senate  adhered  to  its  amendment,  and  the  Assembly  insisted  up- 
on its  resolution  of  non-concurrence.  Each  House  then  appointed 
a  committee  of  conference,  who  agreed  on  the  section  as  it  now 
stands.  Both  Houses  approved  of  the  compromise,  and  the  bill 
was  sent  to  the  Governor  and  approved  by  him  the  same  day. 

No  Statute  of  this  State,  I  presume,  ever  underwent  a  fuller 
discussion,  or  elicited  more  legislative  and  financial  talent  and 
research.  The  attention  of  the  whole  State  was  directed  to  the 
Subject,  from  the  Chief  Magistrate  to  the  humblest  citizen.  The 
Assembly  went  into  committee  of  the  whole  on  this  bill  Twen- 
ty-Six different  times,  and  on  nearly  as  many  different  days  ; 
and  took  upon  it,  and  its  different  sections.  Fourteen  divisions, 
and  the  Senate  Eight.  The  Governor  approved  of  the  bill, 
knowing  it  had  been  passed  as  a  majority  bill ;  for  it  had  not 
the  certificate  required  by  statute  to  be  attached  to  two-thirds 
bills.  [1  R.  S.  156,  §  3.]  Had  his  opinion  been,  that  it  was 
either  an  unconstitutional,  or  a  two-thirds  bill,  it  would  have 
been  his  unquestionable  duty,  to  withhold  his  approbation. 

The  origin,  progress,  and  final  passage  of  the  bill,  and  espe- 
pecially,  the  Message  of  the  Governor  which  recommended  it, 
the  reports  of  the  committees  of  the  Senate  and  Assembly,  and 
the  vote  of  the  Senate  relative  to  its  being  a  two-thirds  bill,  all 
concur  in  furnishing  conclusive  evidence,  that  the  Legislature 
did  not  intend,  by  it,  to  create  corporations. 

The  fact  has  already  been  mentioned,  that  the  Legislature  of 
this  State  has  never  passed  an  act  of  incorporation,  general  or 
special,  without  giving  the  corporate  body  a  seal.      If  there 


69 

was  any  <loubt,  about  the  intention  of  the  Legislature  in  this 
instance,  the  omission,  to  give  the  associations  seals,  would 
solve  that  doubt.  1  have  not  felt  at  liberty  to  omit  a  reference  to 
this  circumstance,  though  I  cannot  but  regard  it  as  comparative- 
ly unimportant,  when  there  are  so  many  other  decisive  proofs  of 
the  intention  of  the  Legislature. 

The  intention  of  the  lawgivers  being  known,  and  I  might  add, 
admitted  by    the  Counsel  for  the  defendant,  how  can  a  court  of 
justice,  which  expounds,  but  does  not  make  the  law,  disregard 
that  intention  ? 

If  it  is  done  at  all,  it  can  only  be  on  the  ground,  that  the  Le- 
gislature designed  to  evade  the  Constitution,  and  have  passed  a 
Statute  in  fraud  of  its  provision.  This,  in  other  language,  is 
saying,  that  the  ninety -six  Senators  and  Members  of  the  As', 
sembly  who  voted  for  it,  have  disregarded  their  oaths.  That, 
instead  of  supporting  "  the  Constitution  of  the  State  of  New 
York,"  as  those  oaths  required,  they  have  deliberately  violated 
it.  When  we  recall  the  names,  characters  and  services  of  those 
gentlemen,  the  thought  is  revolting.  No,  the  true  and  correct 
view  of  the  subject  is,  that  those  distinguished  public  servants, 
and  honest  men,  did  not  intend  one  thing  and  express  another ; 
but,  that  seeing  the  necessity  of  a  change  in  our  system  of  bank- 
ing, determined  to  open  it  to  our  citizens  generally,  and  permit 
them  to  prosecute  it,  if  they  chose,  in  the  form  of  associations, 
which  neither  had  corporate  powers,  nor  would  be  subjected  to 
corporate  odium ;  yet  under  such  regulations  as  would  secure  to 
the  people  a  safe  and  convenient  currency.  These  associations 
may  be  called,  limited  partnerships,  joint  stock  companies,  or 
whatever  else  any  one  chooses,  so  long  as  they  are  not  corpora- 
tions. 

In  discussing  this  branch  of  my  subject,  I  would  call  the  atten- 
tion of  the  Court  to  the  proposition,  that  the  only  safe  evidence 


7D 

of  the  intention  of  the  sovereign  power  to  create  a  corporation, 
is  an  explicit  legislative  enactment.  If  that  is  wanting,  it  is 
almost,  if  not  quite  certain,  that  the  sovereign  will  is  not,  that  a 
corporation  shall  exist ;  and  probably  in  this  country,  the  safest 
and  best  rule  would  be,  that  nothing  but  a  clear  and  unequivo- 
cal legislative  declaration  shall  constitute  a  corporation.  But 
whether  that  is  the  preferable  rule  or  not,  at  least,  this  is  clear, 
that  in  the  absence  of  such  declaration,  nothing  but  the  strongest 
reasons  and  most  unequivocal  evidence,  should  be  considered  suf- 
ficient to  authorize  a  judicial  opinion  in  favor  of  a  corporate  ex- 
istence. 

Let  the  subject  then,  be  viewed  in  what  light  it  may,  the  con- 
clusion appears  to  be  the  same ;  viz.,  that  the  associations  au- 
thorized by  this  Statute  are  not  corporations. 


My  second  position  is,  that,  admitting  that  the  associations 
authorized  by  this  Statute  are  corporations,  still  the  Statute  is 
constitutional. 

tut1inai!\h'o"ugh  ^^  ^^^  ^^^  ^^^t  bc  prcsumcd  to  have  been  cor- 
cSpoTatious.  "^  rectly  passed,  as  will  be  hereafter,  I  trust,  most  sa- 
tisfactorily shown ;  that  is,  by  a  majority  of  a  quorum  of  each 
house,  if  the  bill  is  a  majority  bill,  and  by  "  the  assent  of  two- 
thirds  of  the  members  elected  to  each  branch  of  the  Legislature," 
if  the  bill  is  a  two-thirds  bill ;  the  question  arising  under  my  se- 
cond position  is,  whether  the  Legislature  can  pass  a  law  by  any 
vote,  majority  or  two-thirds,  authorizing  the  formation  of  an  in- 
definite and  unlimited  number  of  bodies  corporate,  or  in  other 
words,  whether  the  Legislature  can  now  provide  by  a  general 
law,  for  the  incorporation  of  an  unlimited  number  of  voluntary 
associations,  as  it  could,  and  did  in  many  instances,  before  the 
adoption  of  the  present  Constitution. 


71 

It  is  admitted  by  all,  that,  previous  to  the  adoption  of  the  pre- 
sent Constitution,  the  Legislature  had  unquestionable  authority 
to  pass  general  laws  of  incorporation,  and  the  power  had  been 
exercised  in  five  prominent  instances,  viz. : 

"An  Act  relative  to  the  university,"  passed  April  5,  1813, 
(2  R.  Laws,  263,)  which  authorized  the  incorporation  of  an  in- 
definite and  unlimited  number  of  colleges  and  academies. 

"An  Act  to  provide  for  the  incorporation  of  religious  socie- 
ties," passed  April  5,  1813,  (3  R.  S.  292,)  which  authorized 
the  incorporation  of  a  like  number  of  religious  societies. 

*'  An  Act  to  incorporate  such  persons  as  may  associate  for  the 
purpose  of  procuring  and  erecting  public  libraries  in  this  State  ;" 
passed  April  1,  1796,  (3  R.  S.  288,)  which  authorized  the  in- 
corporation of  the  like  number  of  libraries. 

"  An  Act  to  incorporate  medical  societies,  for  the  purpose  of 
regulating  the  practice  of  physic  and  surgery  in  this  State,"  pass- 
ed April  10,  1813,  (3  R.  S.  304,)  which  autliorized  the  incor- 
poration of  a  medical  society  in  each  of  the  counties  in  this  State. 

"  An  Act  relative  to  incorporations  for  manufacturing  purpo- 
ses," passed  March  22,  1811,  which  authorized  the  incorporation 
of  an  indefinite  and  unlimited  number  of  voluntary  associations 
for  manufacturing  purposes. 

I  will  here  repeat  the  clause  in  the  Constitution,  which  it  is 
contended  has  deprived  the  Legislature  of  the  power  to  pasa 
general  laws  of  incorporation.     It  is  in  the  following  words : 

"  Sec.  9.  The  assent  of  two-thirds  of  the  members  elected  to 
each  branch  of  the  Legislature,  shall  be  requisite  to  every  bill  ap- 
propriating the  public  monies  or  property  for  local  or  private  pur- 
poses, or  creating,  continuing,  altering,  or  renewing,  any  body  poli- 
tic or  corporate."     [Const.  Art.  7,  §  9.  ] 

The  first  proposition,  for  which  I  contend,  on  this  branch  of 
the  discussion  is,  that  this  clause  in  the  Constitution  is  not  ap- 
plicable to  a  general  law,  which  authorizes  all  our  citizens  to 
unite  in  companies,  and  incorporate  themselves  to  carry  on  any 


72 

business,  or  manufacture,  vvhich  the  Legislature  may  think  can 
be  more  usefully  and  beneficially  for  the  community,  conducted 
in  that  way,  than  by  individual  effort ;  but  on  the  contrary,  was 
intended  to  apply  to  every  separate  act  of  incorporation,  which 
the  Legislature  might  thereafter  pass,  conferring  privileges  on  a 
few,  to  the  exclusion  of  the  many  ;  and  thus  restain  and  impede 
the  granting  of  monopolies,  which  are  exclusive  privileges,  and 
produce  inequalities  of  rights ;  giving  to  a  few  citizens,  advan- 
tages, which  are  refused  to  all  others. 

Two  official  opinions  on  this  subject  have  been  delivered  by 
two  successive  Attorney-Generals  of  this  State,  viz.,  Messrs. 
Bronson  and  Beardsley,  one  on  a  call  from  the  Senate,  and  the 
other  on  a  call  from  the  Assembly. 

The  acknowledged  talents  and  respectability  of  these  officers, 
entitle  their  opinion  to  great  consideration.*  When  we  reflect, 
however,  that  those  officers  have  not  the  aid  of  arguments  by 
Counsel,  and  are  frequently  obliged  to  give  their  opinions  to  the 
Legislature,  without  full  time  for  examination  and  reflection, 
and  in  the  midst  of  other  pressing  professional  and  official  en- 
gagements, we  can  hardly  expect  from  them,  the  matured  and 
cautious  judgment  of  a  judicial  decision.  These  private  acts  of 
incorporation  are  also  often  blended  with  the  attachments,  inter- 
ests, and  struggles  of  political  partizanship,  and  that  man  is 
more  than  human,  who  can  wholly  guard  against  their  influence, 
while  surrounded  by  them,  and  enjoying  honors  and  distinction, 
which  are,  to  some  extent,  at  least,  the  reward  of  partizan  fidel- 
ity. One  of  these  opinions  were  delivered  in  1835,  and  the 
other  in  1837 ;  both,  unfortunately,  since  the  policy  of  creating 
incorporations,  especially  for  banking  purposes,  had  become  in 

*  Mr.  Justice  Bronson  here  remarked  tliat  his  opinion,  alluded  to,  ought  not  to  be 
regarded  as  an  authority.  It  was  formed  without  the  benefit  of  argument  by  Counsel, 
and  was  worth  no  more  than  the  reasons  it  contained,  and  he  should  be  happy  to  hear 
them  fully  examined. 


73 

some  measure,  a  beacon  light,  by  which  to  rally  and  direct  party 
zeal.  We  know  the  learned  and  upright  Judge  who  now  fills 
one  of  these  seats,  too  well,  to  doubt,  that  he  is  not  only  willing, 
but  happy  to  have  recalled,  on  this  occasion,  any  incident  or  in- 
fluence, which  may  perchance  have  imperceptibly  exposed  him 
to  error,  when,  as  Attorney-General,  he  gave  the  opinion  allu- 
ded to.  Knowing  our  danger,  we  may  escape,  and  that  voice 
is  friendly,  which  gives  us  warning. 

Attorney  General  Bronson  gave  his  opinion  on  the  6th  of  Jan- 
uary, 1835,  on  the  call  of  the  Senate.  [Senate  Documents  of 
1835,  No.  4.]  After  a  pretty  full  discussion  of  the  subject  re- 
ferred to  him,  which  was  a  proposed  amendment  of  the  general 
act  authorizing  incorporations  for  manufacturing  purposes,  he 
arrives  at  several  conclusions,  of  which  the  third  is  as  follows  : 

"  The  Legislature  cannot  now  provide  by  general  laws  for  the 
incorporation  of  voluntary  associations,  but  must  act  directly  in 
every  grant  of  corporate  privileges ;  creating  some  one  or  more  cor- 
porations in  particular."     [lb.  p.  13.] 

Attorney-General  Beardsley  gave  his  opinion  on  the  18th  of 
April,  1837,  on  the  call  of  the  Assembly.  [Assembly  Doc.  of 
1837,  No.  303.]  After  a  more  limited  discussion,  than  that  of 
his  predecessor,  he  states  several  conclusions  on  the  subject  re- 
ferred to  him,  which  was,  the  "Act  to  authorize  associations  for 
the  purpose  of  banking,"  which  the  Assembly  proposed  to  pass  in 
1837,  and  which  I  have  mentioned  in  the  former  part  of  my  ar- 
gument, the  third  of  which  conclusions  is  in  these  words : 

"  That  the  bill  is  unconstitutional,  as  it  assumes  to  authorize  the 
creation  of  an  indefinite  and  unlimited  number  of  bodies  corporate, 
and  should  it  pass  into  a  statute,  and  associations  be  formed  under 
it,  they  would,  for  the  purposes  contemplated,  be  absolutely  null  and 
void."     [lb.  p.  9.] 

The  resolution  of  the  Assembly  calling  for  this  opinion  was 
passed  on  the  13th  of  April,  and  the  opinion  was  delivered  on 
the  18th.     A  brief  space  for  forming  an  opinion,  fraught  with 
10 


n 

such  a  momentous  result.  A  result,  which  strips  the  Legislature 
of  our  State  of  a  power,  exercised  repeatedly  from  almost  the 
commencement  of  our  government,  with  the  happiest  and  most 
beneficial  effects. 

Mr.  Bronson,  in  the  fore  part  of  the  same  opinion,  in  which  he 
states  his  conclusion  against  the  power  of  the  Legislature  to 
''  provide  by  general  laws  for  the  incorporation  of  voluntary  as- 
sociations,^' in  answer  to  the  first  interrogatory  from  the  Senate, 
states  the  following  as  his  answer: 

*'  First  The  Attorney-General  can  see  no  substantial  ground 
for  doubt,  that  the  Legislature  may,  by  one  act,  create  two  or  more 
corporations.  The  Constitution  says  nothing  on  that  subject.  It 
only  prescribes  the  number  of  votes  which  shall  be  necessary  to 
every  bill  creating  a  corporate  body  ;  leaving  all  other  questions 
about  the  passing  of  such  laws,  as  they  stood  before,  to  the  discre- 
tion of  the  Legislature."    [lb.  p.  4.] 

In  other  words,  an  act  may  be  passed,  creating  any  given  num- 
ber of  corporations,  from  one  to  one  hundred  thousand,  provided 
each  company  is  distinctly  and  directly  incorporated  by  the  act. 

Both  of  these  conclusions  are  formed  on  the  same  section  of 
the  Constitution.     It  seems  impossible  to  reconcile  these  two 
constructions  of  it.     What  is  there  in  the  language,  or  spirit  of 
the  Constitution,  which  will  prohibit  the  Legislature  from  pass- 
ing a  general  law  for  the  incorporation  of  an  unlimited  number 
of  voluntary  associations  ;  that  is,  from  incorporating  as  many 
companies  as  our  citizens  choose  to  form ;  and  yet  permit  the 
Legislature  by  a  law,  to  incoporate  as  many  companies  as  our 
citizens  choose  to  apply  for.     The  only  difference  is,  that  in  the 
one  case,  the  Legislature  anticipate  the  applications,  and  pass  a 
general  law  to  meet  them  ;  in  the  other,  they  wait  till  the  appli- 
cations are  made,  and  then,  by  one  law,  incorporate  them  alL 
But  I  submit,  that  the  mode  of  legislation  proposed,  is  far  less 
safe,  than  the  one  condemned.     For  a  law  containing  ten,  one 


^5 

hundred,  or  any  given  number  over  one,  of  distinct  incorpora- 
tions, cannot  so  readily  or  conveniently,  nor  will  be  likely  to  be 
so  thoroughly  scrutinized,  by  the  members  of  the  Legislature,  as 
a  general  law  of  incorporation,  plainly  designating  the  object  of 
associating,  and  placing  distinct  landmarks,  and  strong  barriers 
around  the  incoporations  permitted. 

In  truth,  the  Constitution  neither  directs  as  to  one  or  the  other 
mode.  It  is  silent  upon  both ;  and  as  Mr.  Bronson  says  in  his 
first  conclusion : 

"  The  Constitution  says  nothing  on  that  subject.  It  only  pre- 
scribes the  number  of  votes  which  shall  be  necessary  to  every  bill 
creating  a  corporate  body,  leaving  all  other  questions  about  the 
passage  of  such  laws,  as  they  stood  before,  to  the  discretion  of  the 
Legislature." 

This  view  of  the  Constitution  has  been  taken  also  by  every 
Legislature  since  its  adoption,  as  appears  by  a  joint  rule  of  the  two 
houses,  which  has  been  in  force  for  years.  It  is  in  these  words : 
"  The  same  bill  shall  not  create,  renew,  or  continue  more  than 
one  incorporation,  nor  contain  any  provisions  in  relation  to  alter- 
ing more  than  one  incorporation."  [See  Joint  Rules.]  And 
Mr.  Bronson,  after  quoting  this  rule,  adds:  "This  rule  must 
have  been  adopted,  on  the  ground,  that  the  subject  had  not  been 
regulated  by  the  Constitution,  but  rested  in  the  discretion  of  the 
Legislature."     [p.  5.] 

Mr.  Beardsley  also  holds  this  language  in  his  opinion,    [p.  8.] 

Speaking  of  the  Constitution,  he  says  : 

"  In  its  strict  terms,  the  clause  is  confined  to  bills  which  assuTne 
to  create  corporate  bodies,  and  does  not  extend  to  one  which  au- 
thorizes their  creation  by  the  voluntary  association  of  individuals." 
He  adds  :  "  But  this,  in  the  opinion  of  the  Attorney-General,  would 
be  too  narrow  a  construction  of  that  instrument :  it  would  disregard 
its  spirit  and  object,  and  adhere,  with  rigid  technicality,  to  the  let- 
ter. As  understood  by  the  Attorney-General,  it  requires,  that  all 
corporations,  thereafter  to  be  formed  by  the  Legislature,  should  re- 
ceive the  direct  assent  of  two- thirds  of  the  members,  in  the  passage 
of  bills,  indicating  and  creating  each  particular  institution.  This 
is  the  spirit  of  the  provision,  and  is  consistent  with  the  letter." 


The  Court  will  at  once  see,  that  Mr.  Beardsley  does  not  prove, 
but  assumes,  that  the  spirit  of  the  Constitution  is  different  from  its 
language.  He  refers  to  nothing  in  the  context ;  to  no  other  parts 
of  the  Constitution  ;  nor  to  cotemporaneous  history,  which  are  the 
usual  sources  of  light  in  giving  construction  to  doubtful  clauses  of 
a  constitution ;  to  nothing,  to  justify  his  assumption,  that  the  spirit 
and  object  of  the  Constitution  are  different  from  its  language.  And 
yet,  on  such  untenable  ground,  he  gives  it  a  construction,  which  de- 
prives the  Legislature  of  an  otherwise  unquestionable  power ;  and 
that  too,  in  direct  violation  of  a  well  settled  rule  of  construction, 
viz.,  that  when  the  language  of  such  an  instrument  is  plain  and  in- 
telligible, a  court  is  not  at  liberty  to  depart  from  it. 

Both  of  the  gentlemen  direct  their  efforts,  far  more  to  proving 
what  the  Constitution  should  be,  than  what  it  actually  is.  A  peru- 
sal of  their  opinions  will  fully  justify  this  remark.  They  appear  to 
be  deeply  impressed  with  the  idea,  that  the  State  is  in  great  danger 
of  receiving  irreparable  injury  from  the  increase  of  corporations ; 
and  they  seem  to  regard  it  as  their  duty,  to  find  some  constitutional 
mode  of  checking  their  multiplication. 

Mr.  Bronson  says : 

"  It  is  impossible  to  read  the  clause,  without  perceiving,  that  the 
design  of  the  Convention  was  to  impose  a  check  on  the  increase  of 
corporations."  (page  9.) 

"When  such  grants  are  made  with  an  exclusive  reference  to  the 
interests  of  the  applicants  ;  and  when,  however  laudable  may  be  the 
object,  they  are  multiplied  beyond  the  public  wants,  a  positive  in- 
jury is  done  to  the  whole  community." 

«  The  subject  must  have  been  regarded  in  this  light  by  the  fra- 
mers  of  the  Constitution ;  and  without  wholly  prohibiting  future 
grants,  they  imposed  such  a  check  on  the  Legislature,  as  was  deem- 
ed best  calculated  to  secure  the  people  against  the  unnecessary  in- 
crease of  corporate  franchises."  (page  10.) 

The  remedy  Mr.  Bronson  proposes,  for  the  evil,  is  indicated  by 
the  following  extract  from  his  opinion : 

"  The  construction,  which  more  certainly  than  any  other,  will  at- 
tain this  end,  is  that,  which  requires  the  Legislature,  in  cases  not 


already  provided  for  by  law,  to  act  directly  on  every  question  of  this 
description  ;  and  which  requires  the  assent  of  the  members — not  to 
a  bill  under  which  an  indefinite  number  of  corporations  may  spring 
into  life — but  to  a  bill,  creating  some  one  or  more  corporate  bodies 
in  particular.  This  construction,  while  it  is  not  inconsistent  with 
the  letter  of  the  Constitution,  is  best  calculated  to  give  full  effect  to 
the  intention  of  the  Convention,  and  secure  the  public  against  the 
unnecessary  increase  of  corporate  franchises."   (pages  10,  11.) 

Mr.  Beardsley  also  says : 

"  The  mischief  which  the  Constitution  designed  to  prevent,  was 
the  inordinate  increase  of  private  corporations."  (page  8.)  "The 
restraint  is  upon  their  undue  multiplication."  (page  11.) 

The  remedy  which  he  indicates  for  this  evil,  is  the  same  as  that 
proposed  by  his  predecessor.     He  says  : 

"  The  Constitution  demands,  that  the  legislative  discretion  and 
judgment  shall  be  applied  to  every  corporation,  which  must  be  created 
by  bill.  If  the  contemplated  institution  is  approved  by  the  requi- 
site number  of  members,  the  bill  should  pass  into  a  law.  But  the 
discretion  and  judgment  which  are  thus  invoked,  and  the  exercise  of 
which  is  thus  enjoined,  can,  in  no  sense,  be  exerted  in  the  creation 
of  institutions  which  spring  into  existence  at  the  bidding  of  indi- 
viduals." (page  9.) 

Who  does  not  see  ;  and  I  ask  these  gentlemen  themselves,  if  now, 
when  the  incidents  and  associations  of  the  moment  have  passed,  if 
they  do  not  see,  that  they  were  laboring  under  an  undue  apprehen- 
sion of  evil,  in  regard  to  the  increase  of  corporations  1  The  reme- 
dy, too,  which  they  propose,  all  must  see  was  entirely  fallacious,  as 
an  obligatory  constitutional  restriction  on  the  Legislature.  For 
what  legislature;  who  had  deliberately  resolved  to  authorize  pros- 
pectively one  hundred,  or  an  unlimited  number  of  corporations,  to 
promote  and  favor  a  particular  branch  of  trade  or  business ;  would 
refuse  any  number  of  separate  applications  for  the  same  purpose  ? 
Besides,  the  history  of  the  State  for  the  last  fifteen  years,  during 
which,  the  new  Constitution  has  been  in  operation,  shows,  that 
while  no  evils,  political  or  moral,  have  been  experienced  from  the 
many  corporations,  formed  under  our  general  laws,  we  have  suffered 
deep  and  abiding  evil,  from  our  legislation,  in  favor  of  private  cor- 


* 


79 

porations,  and  their  subsequent  action.    The  lobby  of  our  legislative 
.*  halls  has  become  a  by-word  and  a  reproach.     How  have  corporate 

rights  been  stealthily  obtained  from  the  Legislature  ?  What  acts 
of  incorporation  have  savored  of,  and  raised  high  through  the  State, 
the  notes  of  alarm  and  indignation  against  undue  influence,  if  not, 
disgusting  corruption  ?  It  may  certainly  be  said,  not  general 
acts  of  incorporation.  Both  the  gentlemen  appear  to  have  supposed, 
that  if  the  Legislature  was  deprived  of  the  power  to  pass  laws,  which 
did  not  directly,  and  in  terms,  incorporate  a  specific  company,  or 
companies  by  name,  and  were  thus  obliged  to  look  directly  upon 
each  corporation  created,  the  evil  they  so  greatly  apprehended,  would 
be  checked.  For  they  well  concluded,  both  from  the  past  history 
of  our  legislation,  the  operation  of  the  joint  rule  before  mentioned? 
and  the  fitness  of  things ;  that  it  was  highly  improbable,  that  our 
Legislature  would  directly  incorporate,  by  one  law,  more  than  one 
specific  corporation,  and  thus,  they  were  led,  the  one  to  propose,  and 
the  other  to  approve,  an  entirely  new  idea,  which  was ;  that  by  no 
Yote,  either  majority  or  two-thirds,  could  the  Legislature  pass  any 
bill  of  incorporation,  which  did  not,  in  the  language  of  Mr.  Bron. 
son,  "  create  some  one  or  more  corporate  bodies  in  particular,"  by 
direct  legislative  action  on  the  question — and  in  the  language,  sub- 
stantially, of  Mr.  Beardsley,  which  did  not  receive  the  direct  assent 
of  two-thirds  of  the  members  elected  to  each  branch  of  the  Legisla- 
ture,  and  indicate  and  create  a  particular  institution.  The  history 
of  our  legislation  aud  of  the  adoption  of  the  Constitution  shows,  that 
this,  in  the  broad  form  presented,  was  fresh  ground.  While  it  is 
not  the  usual  mode  of  creating  corporations,  by  a  separate  and  dis* 
tinct  bill  for  each  act  of  incorporation,  inasmuch  as  it  permits 
any  given  number  of  corporations  in  particular  to  be  created  by  one 
bill ;  so,  neither  is  it,  the  other  mode,  by  general  act.  Yet,  as  it 
were,  by  a  side  wind,  it  takes  from  the  Legislature  the  well  known 
and  understood  power  of  enacting  general  laws  of  incorporation  in 
the  ordinary  form.  I  hazard  nothing  in  saying,  that  the  Conven- 
tion which  adopted  the  constitutional  provision,  never  even  ap. 
proached  its  conception.  What  a  new  form  our  incorporating  laws 
would  assume,  if  it  was  carried  into  practice?  How  the  Conven. 
tion  would  have  been  startled ;  and  with  what  surprise  would  our 


79 


> 


Kents,  Spencers  and  others,  who  were  members,  been  struck  ;  had  ^ 

the  new  legislative  offspring,  to  which  they  were  unconsciously 
giving  existence,  appeared  in  the  full  stature,  in  which  it  is  proposed 
to  us  :  and  if  informed,  that  while  yet  in  youth,  some  years  short  of 
majority,  it  would  control  our  Legislature,  restrain  its  action,  strip 
it  of  a  beneficial  power,  they  would  have  strangled  it  past  hope.  It 
descends  to,  and  rests  on  the  forms  of  the  bills  which  the  Legisla- 
ture are  to  pass,  and  drives  us  to  the  inquiry,  whether  the  Conven- 
tion intended  to  place  their  restriction,  solely,  on  so  slight  and 
changeable  a  basis.  The  mere  statement  of  the  inquiry  furnishes 
the  answer.  It  may  be  said,  that  a  bill  which  creates  at  once,  and 
without  further  action,  one,  or  any  given  number  of  corporations  in 
particular,  is  no  more  in  substance,  a  bill  creating  bodies  corporate  ; 
than  a  bill  which  authorizes,  regulates  the  manner,  and  designates 
the  object  of  an  unlimited  number  of  corporations.  They  are  both 
in  one  sense,  bills  creating  bodies  corporate,  but  by  different  modes 
of  legislation.  One  accomplishes  the  object  in  one  way ;  and  the 
other  in  another.  In  either  case,  the  corporations  may  be  said  to  bo 
created  by  bill.  And  the  legislative  action  is  substantially,  as  direct, 
in  one  case  as  the  other — for  there  is  no  efficient  action  in  either 
case,  except  in  passing  the  bill.  The  true  difference  is — that  in  one 
case,  the  corporation  is  created  at  once,  and  the  only  act  remaining 
to  be  done,  is  acceptance  by  the  corporators — in  the  other,  the  cor- 
porators are  to  perform  certain  acts  prescribed  by  the  Statute* 
There  is  more  or  less  action  by  individuals  in  each  case.  And  the 
Convention  embraced  and  acted  upon  two  ideas,  fairly  indicated 
by  its  language,  viz.,  1st,  full  and  direct  creation  at  once  by  bill ; 
and  2d,  separate  enactment — which  two  ideas  are  the  distinguishing 
features  of  the  mode  of  corporate  legislation,  intended  to  be  prohibit- 
ed as  will  hereafter  be  more  fully  illustrated. 

And  the  question  recurs,  what  does  the  clause  in  the  Constitution 
prohibit  ?  Does  it  prohibit  the  passage  of  general  laws  of  incorpo- 
ration, or  not  ?  Before  discussing  the  question  on  its  merits,  let  us 
settle  the  matter  of  authority  upon  the  one  side,  as  well  as  the  other. 

Directly  opposed  to  the  opinions  of  Messrs.  Bronson  and  Beardsley, 


is  the  unanimous  opinion  of  the  revisors  of  our  Statutes — Messrs. 
Jno.  Duer,  B.  F.  Butler,  and  John  C.  Spencer.  They  were  clearly 
and  unequivocally  of  opinion,  that  this  clause  of  the  Constitution 
did  not  apply  to  a  general  law  authorizing  the  creation  of  corpora- 
tions ;  and  that  the  Legislature  had  the  same  power  to  pass  such 
laws  after  the  adoption  of  the  present  Constitution  as  they  had  be- 
fore. In  their  revision,  they  proposed  to  revise  and  amend  all  the 
five  general  laws  of  incorporations  before  referred  to.  [See  Revi- 
sors Reports,  chapter  15,  of  the  first  part.  Title  1.  Articles,  2,  3.  of 
colleges.  Articles,  4,  5.  of  academies.  Report  of  chapter  18,  of 
the  first  part,  Title  1.  of  religious  corporations.  Title  2.  of  the  in- 
corporation of  library  societies.  Title  3.  of  medical  societies,  and 
Title  4.  of  manufacturing  corporations.]  They  also  proposed  an 
entirely  new  general  law  of  incorporation,  authorizing  an  indefi- 
nite and  unlimited  number  of  corporations  of  "  Obituary  Societies." 
[Revisors  Report,  chapter  18,  of  the  first  part,  Title  6.] 

Mr.  Bronson,  in  his  opinion,  states,  in  reference  to  the  opinion  of 
the  revisors,  that  he  "  is  aware,  that  there  is  high  authority  for  a 
contrary  opinion"  to  his  own.  The  Legislature  also  which  enacted 
our  Revised  Statutes,  concurred  in  opinion  with  the  revisors,  and 
approved  and  enacted  their  revision  of  the  general  law  authorizing 
the  incorporation  of  academies.  [2  Rev.  Laws,  263.  Revisors'  Re- 
ports, chap.  15,  Title,  1,  Articles,  4,  5.  1,  R.  S.  461.]  And  a  sub- 
sequent Legislature  has  materially  altered  and  amended  the  same 
act  by  a  majority  vote,  as  the  Journals  will  show.  [Laws  of  1835, 
ch.  34.] 

It  will  be  remembered,  that  the  prohibition  in  the  Constitution, 
whatever  it  is,  extends  to  every  law,  "continuing,  altering,  or  re- 
newing, any  body  politic  or  corporate,"  as  well  as  creating  it.  The 
revisors,  consistent  throughout,  were  of  opinion,  that  this  clause  in 
the  Constitution  did  not  apply  to  amendments  and  alterations  of  our 
general  laws  of  incorporation,  any  more  than  to  the  enactment  of 
other  laws  like  them ;  and  so  Mr.  Bronson,  in  his  opinion,  says. 
This  is  his  language  : 

"From  these  reports  it  will  be  seen,  that  the  revisors,  who  were 
gentlemen  of  high  standing  in  the  legal  profession,  entertained  n* 


81 

doubt  upon  two  points ;  first,  that  the  existing  general  laws,  for 
creating  corporate  bodies,  were  still  in  force ;  secondly,  that  they 
might  be  revised  and  amended  in  the  same  manner  as  other  public 
statutes."   [page  7.] 

Mr.  Bronson,  however,  stated  the  following  as  one  of  his  conclu- 
eions : 

"Fourth.  The  existing  laws  for  the  incorporation  of  voluntary 
associations,  may  be  amended ;  but  not  in  such  a  manner  as  to  au- 
thorize associations  which  are  not  now  provided  for  by  law."  [p.  13.] 

This  opinion  is  formed  on  the  constitutional  clause  we  are  con- 
sidering, and  I  would  respectfully  inquire,  how  it  can  be  held  to  ap- 
ply to  a  law,  altering  or  amending  a  body  politic  or  corporate  in 
some  particulars,  and  not  to  a  law,  amending  or  altering  it,  in  other 
particulars. 

The  thirteenth  section  of  the  seventh  article  of  the  Constitution 
contains  a  provision ;  that  all  the  acts  of  the  Legislature  of  this 
State  then  in  force,  and  such  parts  thereof  as  were  repugnant  to  the 
Constitution,  were  abrogated.  Yet  in  the  opinion  of  all,  Messrs. 
Bronson  and  Beardsley  included,  not  only  were  our  general  laws  of 
incorporation  then  in  force,  unaffected  by  the  provision,  but  all 
corporations,  formed  under  them  since  its  adoption,  were  in  like 
manner  unaffected  by  it,  and  were  legally  and  constitutionally  in- 
corporated. If  the  Legislature  cannot  pass  general  laws  of  incor- 
poration ;  on  what  principle  can  those  already  passed  be  amended 
or  altered  ?  And  if  they  cannot  be  altered,  they  are  eternal ;  and 
we  must  be  content  to  have  laws  that  no  earthly  power  can  toucb« 
improve,  or  modify. 

We  have  also  the  opinion  of  the  late  Governor  of  this  State,  the 
Hon.  Wm.  L.  Marcy,  in  opposition  to  the  opinion  of  Messrs.  Bron. 
son  and  Beardsley.    In  his  message  of  1838,  before  quoted,  he  says : 

"  Doubts  have  been  entertained  as  to  the  constitutional  compe- 
tency of  the  Legislature  to  pass  a  general  banking  law,  conferring 
corporate  powers.  Without  entering  into  the  argument  on  this 
question,  I  will  only  say,  that  I  am  inclined  to  the  opinion,  that  the 
Legislature  have  the  power  to  pass  such  a  law ;  but  the  spirit  of  the 
Constitution  requires  that  it  should  be  passed  as  a  two-thirds  bill." 
11 


He  adds :  "  It  is  proper  I  should  also  say,  that  this  opinion  is 
entertained  with  much  diffidence,  and  is  not  expressed  without  duly 
considering  the  respectful  deference  justly  due  to  the  high  authority 
by  which  it  is  opposed." 

To  this  may  be  added  the  deliberate  opinions,  after  full  discus- 
sion, of  the  distinguished  members  of  the  profession  of  law,  who 
were  in  the  Senate  and  Assembly  in  1838  ;  and  the  opinion  of  a  great 
number  of  the  soundest  lawyers  in  this  State,  who  have  been  consulted 
on  this  subject  by  the  different  associations  which  have  been  organ- 
ized under  this  law ;  and  many  of  whom  have  given  high  evidence 
of  confidence  in  their  own  opinions,  by  investing  their  funds  in  those 
associations.* 

When  we  consider  the  high  general  professional  attainments  of 
the  revisers  of  our  laws,  and  their  peculiar  qualifications  to  give  a 
sound  and  correct  construction  to  our  Constitution  ;  the  high  judi- 
cial reputation  of  our  late  Governor,  and  his  unquestioned  qualifi- 
cations to  judge  correctly  upon  the  true  construction  of  the  Consti- 
tution  ;  the  high  professional  reputation  of  a  large  number  of  emi- 
nent lawyers  who  voted  for  this  Statute  in  the  Senate  and  Assem- 
bly, and  of  those  who  have  given  their  opinions  to  the  associations, 
and  vested  their  funds  in  them ;  it  may  be  said,  without  any  impeach- 
ment of  the  acknowledged  and  high  professional  acquirements  of 

♦  I  will  mention'two'prominent  instances.  Chancellor  Kent,  and  George  Grif- 
fin, Esquire  ;  both  of  whom  are  hberal  subscribers  to  the  Bank  of  Commerce,  and 
the  former,  a  large  subscriber.  The  labors  and  reputation,  of  Chancellor  Kent  belong 
to  the  country;  and  notliing,  which  I  can  say,  will  enhance  the  value  of  the  former, 
or  add  to  the  latter.  It  is  sufficient  to  mention  liis  name,  to  inspire  all  the  confidence 
that  human  worth  commands.  I  tnay  be  allowed,  however,  to  remark,  that  although 
he  has  now  entered  upon  his  seventy-seventh  year,  his  faculties  of  mind  and  body  ap- 
pear to  be  unimpaired,  his  step  is  yet  elastic,  and  liis  mind  active.  Since  liis  retire- 
ment from  the  office  of  Chancellor,  in  consequence  of  having  arrived  at  the  age  luni- 
ted  by  the  Constitution,  which,  if  my  memory  serves  me,  was  on  the  30th  of  July, 
1823,  he  has  vmtten  his  Commentaries,  which  have  already  passed  through  tliree  edi- 
tions, each  of  which  he  has  enlarged,  improved  and  corrected  himself.  He  has  also  done 
a  very  large  amount  of  professional  busmess  at  his  chambers,  in  giving  and  writing  opin- 
ions, preparing  vmtten  arguments,  and  drafting  special  conveyances  ;  and  although  his 
charges  are  always  very  reasonable,  he  has  thus  made  a  hberal  provision  for  his  family ; 
and  stUl  unimpaired,  by  such  a  long  and  steady  course  of  useful  and  honorable  em- 
ployments thus  happily  ended,  now  waits  liis  hour  with  cheerfiU  serenity. 

George  Griffin,  Esq.  This  gentleman  is  also  well  Imown  to  the  profession.  He 
is  in  its  very  first  rank — and  when  age,  lengtli  of  active  practice,  ripened  experience, 
natural  talent,  the  powers  of  the  wary  and  watchful  advocate,  and  the  importance  and 
extent  of  professional  engagements  are  considered,  perhaps  I  should  say,  at  the  head 
of  the  practicing  Bar  of  this  State,  especially  at  Nisi  Prius. 


83 

Messrs.  Bronson  and  Beardsley,  that  the  unanimous  and  concurring 
opinions  of  the  three  revisers,  (supported  as  they  are  by  the  opin- 
ions of  others,)  upon  all  the  propositions  we  have  just  been  discuss- 
ing, should  rather  command  our  assent,  than  the  opinions  of  those 
two  gentlemen  which  we  have  been  considering. 

Tested,  therefore,  by  the  weight  of  authority,  it  must  be  deter- 
mined, that  the  Constitution  does  not  apply  to  general  laws,  creating, 
or  authorizing  the  creation  of  corporations ;  and  that  our  Legis- 
lature may  now,  as  they  could  before  its  adoption,  pass  such  laws. 

One  reflection  here  occurs.  By  holding  the  construction  of  the 
Constitution  for  which  we  contend,  the  course  of  legislation  is  clear, 
wholesome  and  safe.  By  taking  the  other ;  we  meet  with  diflicul. 
ties ;  are  involved  in  counter  currents,  if  not  inconsistencies ;  legisla- 
tion is  driven  into  devious  courses ;  doubts  are  cast  upon  private 
rights  ;  and  hoqest  industry  alarmed  and  checked. 

Let  us  now  direct  our  attention  to  the  determination  of  the  true 
construction  of  the  clause  of  the  Constitution  under  discussion. 

The  first,  most  usual,  and  natural  mode,  is  to  look  into  the  previ- 
ous and  cotemporaneous  history  of  the  State,  and  ascertain  the  evils 
which  this  constitutional  provision  was  intended  to  guard  against 
for  the  Future.  In  an  uncompromising  search  for  truth,  the  fact 
cannot  be  disguised,  that  the  circumstances  attending  and  con- 
sequent upon  the  incorporation  of  the  Bank  of  America,  on  the 
2d  June,  1812,  gave  rise  principally,  if  not  wholly,  to  this  clause 
of  the  Constitution.*  The  prorogation  of  the  Legislature  by  the 
Governor  of  this  State,  for  the  avowed  object  of  preventing  the  in- 
corporation of  that  bank  by  corrupt  means  ;  (the  vote  upon  which 
showed  a  settled  majority  of  one  in  its  favor  ;)  the  subsequent  in- 
dictment, for  bribing,  or  attempting  to  bribe  members  of  the  Le- 
gislature ;  and  the  public  trial  of  two  gentlemen,  who  had  theretofore 

*The  charter  of  that  bank  has  since  its  incorporation  been  materially  amended,  its 
capital  reduced,  and  it  is  now  imder  the  management  of  our  most  respectable  citi- 
zeng,  none  of  whom,  it  is  beUeved,  were  actively  concerned  in  procuring  its  charter. 
It  now  stands  among  the  first  monied  institutions  of  our  State,  and  its  officers  receive 
and  deserve  the  full  confidence  and  respect  of  the  community. 


84 

stood  high  in  public  estimation  ;  been  repeatedly  honored  with  offi- 
ces of  high  public  trust,  and  both  of  whom  were  then  in  office,  and 
discharging  the  duties  of  their  respective  stations  ;  the  alarm  which 
was  felt  by  the  community,  lest,  our  institutions  should  fall  a  prey 
to  a  daring  thirst  of  gain,  which  sought  its  gratification  by  cor- 
rupting tho  very  fountain  of  our  laws ;  were  all  yet  held  in  vivid 
remembrance.  And  down  to  the  very  time,  and  during  even  the  ses- 
sion of  the  Convention  which  framed  our  present  State  Constitution, 
the  public  press  was  the  vehicle  of  charges,  criminations  and  re- 
criminations, against  many  of  our  public  men,  for  their  alleged 
agency  in  procuring  the  charter  of  that  bank.  And  some  of  those 
gentlemen  were  members  of  that  Convention.  And  it  was  probably 
owing  to  this  circumstance,  that  the  clause  underwent  so  little  dis- 
cussion in  the  Convention  as  it.  did,  and  to  the  same  circumstance, 
that  Mr.  King,  the  chairman  of  the  .committee  who  reported  it,  as- 
signed his  reasons  for  its  adoption,  in  brief  and  general  terms.  [De- 
bates of  Conv.  p.  446.]  And  doubtless  to  the  fact,  that  some  of  the 
gentlemen,  charged  with  delinquency  in  regard  to  the  chartering  of 
that  bank,  and  many  of  their  relatives  and  friends  were  still  on  the 
theatre  of  action  in  this  State,  is  to  be  attributed,  the  guarded 
though  still  explicit  language  of  Chief  Justice  Nelson,  when  speak- 
ing of  the  evil  which  this  clause  in  the  Constitution  was  intended 
to  check,  in  his  opinion,  delivered  in  the  case  of  The  People,  vs. 
Morris,  [13  Wend.  336,]  and  to  which  I  shall  hereafter  call  par- 
ticular attention. 

That  this  section  of  the  Constitution  owed  its  origin  to  the  cause 
mentioned,  more  evidently  appears  from  the  fact,  that  as  first  pro- 
posed  and  reported  by  Mr.  King,  it  only  required  the  assent  of 
two-thirds  of  the  members,  « in  both  houses,  to  the  passage  of  any 
act  of  incorporation'^  And  it  was  afterwards  amended  in  the  Con- 
vention, by  extending  it  to  acts,  "  appropriating  public  monies  for  * 
local  purposes."  [Debates  of  Convention,  p.  446.]  Chief  Justice 
Nelson,  who  was  a  member  of  the  Convention  from  Cortland  county, 
hafl  also  added  his  authority  in  favor  of  my  position  in  respect  to 
the  true  origin  of  this  constitutional  provision.     Speaking  of  the 


85 

time  when  the  present  Constitution  was  formed,  and  of  the  evil 
which  it  was  intended  to  remedy,  ho  says  : 

"  But  private  corporations  had  multiplied  to  an  extent  that  had 
attracted  public  attention,  especially  banking  institutions.  These 
had  been  sought  for  with  zeal,  and  their  enactment  attended  with 
circumstances  that  awakened  public  suspicion  and  alarm.  So 
extreme  had  the  evil  become  at  one  period  of  our  history,  that 
the  Chief  Magistrate  of  the  State  felt  it  his  duty  to  exercise  the 
power  then  existing  in  the  Constitution,  of  proroguing  the  Legis- 
lature, and  was  triumphantly  sustained  by  the  people  in  the  exe- 
cution of  ihis  high  and  delicate  trust.  The  fact  affords  strong 
evidence  of  the  deep  impression  .made  upon  the  public  mind  as 
to  these  and  similar  private  corporations,  and  of  the  scope  and 
purpose  of  the  clause  on  this  subject.  If  we  resort  to  the  history 
of  its  introduction  into  the  new  Constitution,  the  above  view 
will  be  confirmed.  Mr.  King,  chairman  of  the  committee  of  the 
Legislative  department,  reported  the  section  ;  and  when  it  came 
under  consideration,  said  that  the  committee  had  looked  upon  the 
multiplicaiton  of  corporations  as  an  evil ;  they  had  been  created 
for  a  variety  of  purposes  ;  they  were  exceptions  to  the  common 
law  ;  they  could  -not  be  proceeded  against  in  the  ordinary  way  of 
prosecutions  against  individuals  in  courts  of  justice ;  they  ought 
not  to  be  increased,  but  should  be  diminished  as  far  as  could  be 
done  consistently  with  the  preservation  of  vested  rights.  It  is  ob- 
vious, though  the  language  used  in  the  clause  in  question  is  general, 
that  the  honorable  chairman  had  in  his  mind,  (and  he  spoke  for  the 
committee,)  the  case  of  private  corporations ;  that  the  great  in- 
ducements to  the  adoption  of  the  clause  was  a  check  upon  them ; 
and  that  the  organization  of  communities,  and  the  investing  them 
with  the  privileges  of  mere  munincipal  jurisdiction  and  author- 
ity, were  not  at  all  in  contemplation."  [The  People  vs.  Morris,  13 
Wend.  336,  337.] 

It  will  be  observed  that  the  Chief  Justice  in  speaking  generally 
of  the  evils  which  the  Constitution  intended  to  remedy,  remarks, 
"  Private  incorporations  had  multiplied  to  an  extent  that  had  at- 
tracted public  attention,  especially  banking  institutions.^^  A  re- 
currence, however,  to  the  history  of  the  times  will  satisfy  him,  that 
the  idea  of  a  repeal  of  the  Restraining  Act,  or  the  passage  of  a 
general  law  of  incorporation  for  banking  purposes,  was  the  farther- 
est  possible  from  the  mind  of  the  Convention.  That  no  one  at 
that  day,  even  in  his  wildest  dreams,  thought  of  opening  the  busi- 


86 

ness  of  banking  to  all  our  citizens.  The  evil  that  pressed  the  Con- 
vention and  the  public  was,  the  frequency  of  the  enactment  of  sep- 
arate acts  of  incorporation,  each  of  which  thronged  our  capitol,  and 
legislative  halls  with  their  agents,  who  found  their  reward  in  ob- 
taining exclusive  privileges,  principally  for  banking,  which  were 
withheld  from  our  citizens  generally.  Opening  at  once,  to  a  whole 
community,  the  business  of  banking,  allowing  all  to  bank  who 
choose,  is  a  very  different  measure,  rests  on  entirely  different  prin- 
ciples of  policy,  and  must  be  followed  by  entirely  different  results ; 
from  increasing  from  time  to  time,  under  a  strong  external  pressure 
upon  the  Legislature,  stimulated  by  individual  interest,  private 
and  exclusive  corporate  privileges  for  banking.  Nothing  more 
clearly  shows  the  difference  between  the  two,  than  the  history 
of  the  enactment  of  our  present  General  Banking  Law,  and  of 
the  separate  incorporation  of  the  other  banks  of  the  State.  Nor 
does  any  thing  more  satisfactorily  prove  the  certainty  of  the  over- 
throw  of  the  banking  monopolies  of  this  State,  and  the  suppression 
of  their  spirit,  than  the  early,  steady,  active  and  persevering  oppo- 
sition of  the  holders  of  the  exclusive  charters,  to  the  new  general 
system. 

The  debates  of  the  Convention,  though  very  brief,  general  and 
unsatisfactory,  also  show  that  the  evil  aimed  at  was  the  multiplica- 
tion of  monopolies — ^partial  and  unequal  laws — exclusive  privileges, 
which  benefit  a  few  to  the  injury  of  the  many.  [Debates  of  Con. 
446.] 

As  there  never  was  any  complaint  against  the  corporations  cre- 
ated under  general  laws ;  there  would  seem,  therefore,  to  be  no 
doubt,  but  that  this  provision  in  the  Constitution  was  intended  to 
remedy  the  evil  of  partial  legislation,  and  to  remove  the  temptations 
to  corruption  which  such  a  course  of  legislation  necessarily  draws 
after  it.  The  obvious  and  natural  remedy  was  the  one  adopted,  viz., 
not  to  allow  the  enactment  of  a  law  ;  either  "  appropriating  the 
public  monies  or  property  for  local  or  private  purposes  ;"  by  which 
the  few  would  be  benefitted  at  the  expense  of  the  many ;  or  "  creating, 
continuing,  altering,  or  renewing  any  body  politic,  or  corporate,"  by 


87 

which  privileges  would  be  conferred  on  a  few,  to  the  exclusion  of 
the  many  ;  by  the  vote  of  a  bare  majority  ;  but  that  when  cither  of 
those  objects  were  sought  through  the  agency  of  the  Legislature, 
it  should  be  so  clear  a  case,  that  two  to  one  should  be  in  favor  of 
it ;  and  besides,  if  another  case  like  the  Bank  of  America  should  oc- 
cur, in  which  the  applicants  for  an  exclusive  privilege  should  be 
so  reckless  in  regard  to  the  means  of  effecting  their  object,  as  to 
use  the  criminal  and  subduing  power  of  gold,  they  should  be  com- 
pelled to  conquer  two-thirds  of  all  the  members  elected  to  each 
branch  of  the  Legislature — a  much  moie  difficult,  hazardous,  and 
expensive  cnterprize,  than  drawing  into  their  interest  a  bare  ma- 
jority of  each  House. 

There  was  at  that  time,  and  still  is,  only  two  modes  of  Legislation 
known  or  understood  for  incorporating  companies.  One,  by  a  gener- 
al law,  allowing  all  who  choose,  to  take  an  act  of  incorporation  for 
conducting  a  particular  business  or  trade.  The  other,  by  a  spe- 
cial act,  incorporating  a  single  and  specific  company. 

Is  it  not  then  obvious  to  all,  that  this  clause  in  the  Constitution, 
so  far  as  it  relates  to  corporations,  was  intended  to  apply  to  that 
mode  of  corporate  legislation,  by  which  one  act  incorporated  a  sin- 
gle and  separate  company,  and  not  to  general  laws,  conferring  the 
same  privileges  upon,  and  affecting  all  our  citizens  alike. 

Although  Governor  Marcy's  remark  in  his  message  of  1838, 
that  the  spirit  of  the  Constitution  required,  that  a  general  banking 
law  should  be  passed  as  a  two-thirds  bill,  was  made,  as  he  said,  with 
much  diffidence,  his  high  political  and  judicial  standing  demands 
a  notice  of  it.  He  appears  to  have  made  the  remark,  without  re- 
curring to  the  origin  and  cause  of  the  constitutional  provision  ;  or 
to  the  two  modes  of  corporate  Legislation  then  in  use.  He  makes 
the  remark  apparently  under  the  general  impression,  that  banking 
institutions  are  within  the  spirit  of  the  clause,  without  reflecting 
upon  the  great  difference  between  opening  banking  to  all,  and  re- 
stricting it  to  a  few  ;  or  that  a  general  banking  law,  conferring  cor- 
porate powers,  is  no  more  within  the  spirit  of  the  Constitution, 
than  a  general  manufacturing  law;  a  general  insurance  law;  a 


88 

general  whale  fishery  law  ;  or  any  other  general  law  conferring 
like  powers.  If  one  general  law,  creating  corporations  for  a  par- 
ticular purpose,  is  within  the  Constitution,  than  every  other  gen- 
eral  law,  conferring  corporate  rights  for  whatever  purpose,  is  also 
within  it.  I  cannot  but  persuade  myself,  that  if  the  Governor  had 
looked  at  the  question  in  all  its  bearings  and  effects,  he  would  have 
concurred  with  the  revisors  of  our  Statutes,  in  this  particular,  as 
he  did  in  the  more  general  proposition,  that  the  Legislature  had  the 
same  power  now,  as  before  the  adoption  of  the  Constitution,  to  pass 
general  laws  of  incorporation  ;  and  that  the  restrictive  clause  was 
only  applicable  to  private  and  exclusive  legislation. 

The  language  of  the  Constitution  fairly  and  naturally  indicates 
and  covers  this  special  legislation.     It  is : 

"  The  assent  of  two-thirds  of  the  members  elected  to  each  branch 
of  the  Legislature,  shall  be  requisite  to  every  bill  appropriating  the 
public  monies  or  property  for  local  or  private  purposes,  or  creat- 
ing, continuing,  altering  or  renewing,  any  body  politic  or  corporate." 

Does  not  the  section,  tested  by  its  language,  apply,  and  only  ap- 
ply to  that  mode  of  creating  corporations,  then  in  general  use,  by  a 
separate  act  for  each  incorporation  ?  The  assent  required  shall  be 
"  to  every  bill,"  &c., "  creating,  &;c.,  any  body  politic  or  corporate.'* 
The  language  indicates  separateness  and  directness  of  legislation, 
and  must  be  strained,  to  embrace  general  laws  and  indirect  incorpo. 
ration. 

I  do  not  mean  to  be  understood  as  contending,  that  if  a  law  in- 
corporates more  than  a  single  company,  it  is  not  therefore  era- 
braced  by  the  Constitution.  I  contend  for  the  great  and  manifest 
distinction,  between  general  and  private  legislation  ;  between  a  law 
that  confers  the  same  privileges  on  all,  and  one,  which  confers  pri- 
vileges on  a  few  to  the  exclusion  of  the  many.  It  may  be  difficult  to 
mark  the  exact  line  ;  but  not  more  so,  than  to  determine  the  old 
line  between  public  and  private  acts ;  between  internal  improve- 
ments for  general,  and  those  for  local  benefit ;  and  between  bills 
appropriating  public  monies  for  local  and  private  purposes,  and 
tbose  appropriating  them  for  general  purposes.     There  is  a  broad 


89 

distinction  between  them,  founded  on  reason  and  principle.  One 
is,  and  the  other  is  not,  within  the  evil  provided  against.;^  One  is, 
and  the  otlier  is  not,  within  the  letter  or  spirit  of  the  Constitution. 

Neither  Mr.  Bronson,  nor  Mr.  Beardsley  claims,  that  the  words 
of  the  Constitution  naturally  and  freely  apply  to  general  acts  of 
incorporation.  All  they  contend  for,  in  respect  to  the  language, 
is,  that  it  is  not  directly  inconsistent  with  their  construction  of  the 
clause.     Mr.  Bronson  says  : 

"  This  construction,  (that  is,  his  construction,)  while  it  is  not  in- 
consistent with  the  letter  of  the  Constitution,  is  best  calculated," 
dec,  "  Such  laws,  (that  is  general  laws,)  if  not  in  direct  conflict 
with  the  letter  of  the  Constitution,  would  be  plainly  calculated," 
&;c.     [page  4.] 

Mr.  Beardsley  says : 

"  In  its  strict  terras,  the  clause  is  confined  to  bills  which  assume 
to  create  corporate  bodies,  and  does  not  extend  to  one  which  author- 
izes their  creation  by  the  voluntary  association  of  individuals. 
But  this,  in  the  opinion  of  the  Attorney-General,  (that  is,  his  opin- 
ion,) would  be  too  narrow  a  construction  of  that  instrument." 

And  then,  after  stating  it  as  his  opinion,  that  the  correct  con- 
struction of  the  Constitution  is  to  consider  it  applicable  to  laws  au- 
thorizing the  incorporation  of  voluntary  associations,  he  says  : 

"  This  is  the  spirit  of  the  provision  and  is  consistent  with  the 
letter."     [page  8.] 

Governor  Marcy  also  distinctly  intimates  his  opinion,  that  a 
general  hanking  law  is  not  within  the  words  of  the  restrictive  clause. 
He  remarks,  however,  yet  with  much  diffidence,  as  we  have  seeD^ 
that  "  the  spirit  of  the  Constitution  requires  it  should  be  passed  as 
a  two-thirds  bill. 

The  framers  of  the  Constitution  were  well  aware  of  our  general 
laws  of  incorporation,  and  of  the  frequency  with  which  such  laws 
were  passed.  Some  of  them  were  even  alluded  to  in  the  few  re- 
marks that  were  made  in  convention  on  adopting  the  restrictive 
section.  Had  it  been  the  intention  of  the  Convention  to  include 
within  this  provision  of  the  Constitution  general  laws  of  incorpo- 
ratioD,  would  not  other  and  appropriate  language  for  that  purpos 
13 


90 

hare  been  used?  and  especially,  if  the  Convention  had  intended 
to  prohibit  altogether  the  passage  of  any  more  general  laws  of  in^ 
corporation,  either  by  a  majority  or  two-thirds  vote  ;  (for  let  it  be 
kept  steadily  in  mind,  that  that  is  the  position  contended  for  by 
our  opponents  and  sanctioned  by  the  opinion  of  Messrs.  Bronson  and 
Beardsley,)  would  not  other  language  have  been  used  ?  would  not 
another  and  a  distinct  section  have  been  introduced  into  the  Con- 
stitution ?  The  manifest  object  of  this  section  was  to  declare  hy 
what  vote,  certain  laws  thereafter  should  be  passed,  and  not  what 
laws  should  or  should  not  be  thereafter  passed.  Besides  ;  if  the 
Convention  had  supposed,  that  the  effect  of  this  section  would  be 
entirely  to  prohibit  thereafter  the  passage  of  all  general  acts  of  in- 
corporation, there  would  certainly  have  been  opposition  ;  the  policy 
of  the  measure  would  at  least  have  been  doubted  by  many  ;  a  debate, 
and  a  full  and  protmcted  one,  would  have  ensued.  The  public 
would  have  been  alarmed  by  such  a  proposition,  and  the  Press  would 
doubtless  have  been  heard.  And  had  the  Convention  intended  to 
prohibit  the  passage  of  general  laws  of  incorporation  for  conduct- 
ing the  business  of  banking,  or  insurance,  or  any  other  trade  or  bu- 
siness ;  would  there  not  have  been  in  the  Constitution  an  appropriate 
clause  ?  or  had  the  Convention  intended  to  do  anything  except  reg- 
ulate the  mode  of  legislation  in  respect  to  the  vote  to  be  given  ; 
would  they  have  left  their  intention  in  doubt  ? 

Seeing  then,  that  the  language  of  the  section  does  not  call  for» 
but  on  the  contrary,  repels  the  construction  claimed  by  the  Counsel 
for  the  defendant ;  seeing  also  that  it  was  not  the  intention  of  the 
framers  of  the  Constitution  to  prohibit  thereafter  the  enactment 
of  general  laws  of  incorporation  ;  let  me  inquire  briefly,  if  the  light 
of  experience  should  induce  this  tribunal,  to  extend  this  constitu- 
tional  provision  by  construction,  beyond  the  natural  and  fair  pur- 
port of  its  language. 

I  think  it  far  from  rashness  to  assert,  that  if  this  section  of  the 
Constitution  could  be  submitted  now  to  the  people  of  this  State,  it 
would  be  repealed  almost  unanimously.*     Instead  of  promoting  pu- 

*  C&  Jus.  Nelson  remarked  in  this  stage  of  the  argument,  that  it  was  universally' 


91 

rity  in  our  legislation,  or  restraining  exclusive  and  unequal  grants 
of  corporate  privileges,  it  has  the  directly  opposite  tendency,  by  en- 
abling a  few  members  in  each  branch  of  the  Legislature  to  con- 
trol its  action,  and  thus  force  through  the  forms  of  legislation,  ma- 
ny measures,  as  unjust  as  they  are  unwise. 

Mr.  Beardsley,  in  his  opinion,  uses  quite  as  strong  language  on 
this  subject  as  could  be  expected  from  him  in  the  position  and  re- 
lations he  then  stood.     He  says  : 

"  The  restraint  imposed  by  the  Constitution  may  be  an  unwise 
one,  and  unsuiled  to  the  present  condition  and  wants  of  the  com- 
munity. It  may  have  been  imposed  without  adequate  cause,  and 
have  proved  to  be  illusory  and  mischievous.  These  are  all  possi- 
ble,    (page  9.) 

I  do  not  hesitate  to  add,  that  they  care  all  true ;  and  that  such  is 
the  opinion  of  this  community. 

The  report  of  the  committee  of  the  Senate  made  in  1837,  and 
from  which  I  have  already  given  extracts  for  another  purpose, 
holds  the  hold  and  direct  language  of  truth  on  this  subject ;  and 
shows  the  lamentable  and  humiliating  influence  which  this  provis- 
ion of  the  Constitution  has  had  in  practice  on  our  legislation. 

The  question  then  arises ;  is  it  the  duty  of  this  Court  to  extend 
this  constitutional  provision  by  construction  ;  or  is  it  rather  their 
duty  to  restrict  its  influence  ?     The  answer  is  obvious. 

There  is  a  single  other  idea  which  ought  to  be  stated  in  this  con- 
i^ction  ;  and^that  is,  that  there  is  no  danger  from  any  source,  in 
permitting  a  legislature  to  legislate  for  the  general  benefit  of  the 
community  ;  which  must  always  be  the  case,  with  all  general  laws 
of  incorporation.  They  create  no  distinctions;  they  confer  no 
exclusive  privileges  ;  they  benefit  all  alike.  Such  a  power,  surely, 
ought  not  to  be  taken  from  our  Legislature,  by  implication  or  con- 
struction. 

admitted,  that  the  provision  of  the  Constitution  had  entirely  failed  to  effect  the  object 
intended.    Instead  of  remedying,  it  had  increased  the  evil. 

Mr.  Justice  Bronson  expressed  his  full  concurrence  in  this  remark  of  the  Chief 
Justice ;  and  added,  that  every  one  must  be  sensible  of  ita  truth,  who  had  been  Au 
miliar  for  some  years  past  with  our  legislation. 


This  Court  in  the  case  of  the  People  vs.  Morris,  (13  Wend.  325,) 
decided,  under  an  opinion  delivered  by  the  Chief  Justice,  in  respect 
to  which  it  is  bare  justice  to  say,  that  it  challenges  an  equality  with 
any  one  contained  in  our  Reports,  that  laws,  both  general  and  spe- 
cial, incorporating,  or  altering  the  acts  of  incorporation  of  our  cit- 
ies and  villages,  were  not  within  the  operation  of  this  clause  of  the 
Constitution,  and  might  be  passed  by  majority  votes  ;  although  the 
Court  admitted  that  they  were  within  its  letter.  The  great  princi- 
ple, on  which  this  decision  rests,  is  that  these  corporations,  being 
bodies  politic,  were  created  for  the  general  benefit  of  the  communi- 
ty, and  were  not  wiihin  the  evil  intended  to  be  remedied  by  this 
constitutional  provison,  and  that  it  would  be  dangerous,  and  could 
not  have  been  intended  by  the  Convention,  "  to  restrict  the  action 
of  the  Legislature  in  the  municipal  regulations  of  the  State."  The 
Chief  Justice  thus  expresses  himself: 

"  Are  they  within  the  evil  this  provision  was  designed  to  remedy  ? 
No  one,  I  think,  acquainted  with  the  history  of  the  times,  or  with 
the  introduction  of  this  clause  into  the  Constitution,  will  venture 
upon  this  ground.  It  may  be  fortunate  for  truth,  and  what  is 
deemed  a  sound  exposition  of  this  provision,  that  all  who  may  de- 
sire to  examine  it,  can  recur  to  his  own  recollection,  and  challenge 
that  of  others  upon  this  point.  We  think  we  hazard  nothing  in 
asserting,  that  the  multiplication  of  cities  or  villages  by  the  Legis- 
lature has  at  no  time  been  a  subject  of  complaint."    (lb.  p.  336.) 

How  fully  and  forcibly  this  language  covers  the  whole  ground 
occupied  by  the  present  discussion.  Who,  acquainted  with  the 
history  of  the  times,  will  venture  to  assert,  that  the  passing  of  gen- 
eral acts  of  incorporation  has  at  any  time  been  the  subject  of  com- 
plaint !  As  such  acts  were  not  within  the  evil  intended  to  be 
remedied,  they  should  be  excluded  from  the  operation  of  the  con- 
stitutional restriction,  even  if  within  its  words,  on  the  principle  of 
the  decision  just  cited ;  a  fortiori,  they  should  be  excluded,  not  be- 
ing within  its  words. 

This  great  principle  has  been  acted  upon  in  this  state  ever  since 
the  adoption  of  the  present  Constitution,  in  respect  to  bills  "appro- 
priating public  monies  or  property  for  local  or  private  purposes." 
Our  legislation  has  b^en  uniform  in  passing  bills  of  this  kind  by  the 


93 

ordinary  majority  vote,  where  the  benefit  was  general,  though  the 
appropriation  was  confessedly  local. 

I  conclude  this  branch  of  my  argument  by  stating  the  answer  to 
the  question  proposed,  viz.,  that  this  constitutional  provision  is  not 
applicable  to  general  acts  of  incorporation,  and  that  the  legisla- 
ture can  pass  a  law  by  any  vote,  majority  or  two-thirds,  authori- 
zing the  formation  of  an  indefinite  and  unlimited  number  of  bodies 
corporate;  or  in  other  words,  that  the  Legislature  can  now  provide 
by  a  general  law  for  the  incorporation  of  an  unlimited  number  of 
voluntary  associations,  as  it  could  and  did  in  many  instances  be- 
fore the  adoption  of  the  present  Constitution. 

But  if  the  Court  is  not  fully  satisfied  with  this  conclusion,  and 
their  minds  are  still  in  doubt,  let  me  present  one  other  rule  of  con- 
struction applicable  to  these  great  constitutional  questions  ;  a  rule 
founded  in  the  purest  wisdom,  and  supported  by  the  highest  au- 
thority. It  is,  that  no  statute  should  be  declared  unconstitutional, 
unless  it  is  clearly  and  unquestionably  a  violation  of  the  Constitution. 

This  Court,  in  the  case.  Ex  Parte  M^ Collum,  (1  Cow.  564,)  said, 
"  Before  the  Court  will  deem  it  their  duty  to  declare  an  act  of  the 
Legislature  unconstitutional,  a  case  must  be  presented  in  which 
there  can  be  no  rational  doubt."  And  the  Supreme  Court  of  the 
United  States,  in  the  case  of  Dartmouth  College  vs.  Woodward,  (4 
Wheat.  R.  625,)  held,  "  That  in  no  doubtful  case  would  it  pro- 
nounce a  legislative  act  to  be  contrary  to  the  Constitution." 

If  then  the  argument,  which  has  been  presented,  has  failed  to 
produce  conviction,  and  only  brought  the  Court  into  doubt,  as  to 
the  constitutionality  of  the  Statute,  that  doubt  must  be  resolved  in 
favor  of  its  validity  ;  and  thus  protect  the  immense  amount  of  pro- 
perty invested  under  its  sanction,  and  secure  to  the  community  the 
great  benfits  which  have  and  must  flow  from  its  enactment. 


statute  Is       ]\f  y  third  and  last  position  is,  that  admitting  that  the 

constitution-  "^  '  o 

ally  passed,  constitutional  restriction  is  applicable  to  general  acts 
of  incorporation  ;  then  I  insist,  that  such  a  law  may  be  passed  by 
a  two-thirds  vote,  and  that  this  Law  will  be  presumed  to  have  been 


One  of  the  propositions  stated,  and  I  trust  satisfactorily  proved, 
in  the  course  of  the  argument  in  support  of  my  second  position,  is, 
that  the  constitutional  provision  was  only  intended  to  prescribe  the 
vote  by  which  each  act  should  be  passed,  which  appropriated  public 
monies  to  local  or  private  purposes,  or  created,  or  altered  any  body 
politic  or  corporate,  and  left  every  thing  else  to  the  discretion  of 
the  Legislature.  This  manifestly  appears  from  the  section  itself, 
and  might  probably  have  been  safely  assumed  without  any  argu- 
ment.  The  only  question  then  remaining  is ;  whether  this  Court 
is  not  bound  to  presume,  that  this  as  well  as  every  other  act  of  the 
Legislature,  which  has  passed  through  the  office  of  the  Secretary  of 
State  to  the  State  Printer,  and  been  published  according  to  law,  has 
not  been  constitutionally  passed ;  or  in  other  words,  whether  this 
Court  can  inquire  beyond  the  certificate  of  the  Secretary  of  State, 
and  institute  an  investigation  respecting  the  manner  in  which  any 
given  law  has  passed  the  Legislature. 

I  hold  with  confidence  the  negative  of  this  proposition. 

Our  Statutes  declare : 

"  §  10.  He,  (the  State  Printer,)  shall  print,  in  volumes  of  oc- 
tavo size,  so  many  copies  of  the  laws  of  each  session,  with  the  con- 
current resolutions  and  indexes  that  shall  be  delivered  to  him  for 
that  purpose,  by  the  Secretary  of  State,  as  shall  be  annually  directed 
by  the  Secretary,  who  shall  also  revise  and  correct  the  proof  sheets. 

"§  12.  All  laws  passed  by  the  legislature,  may  be  read  in  evi- 
dence from  the  volumes  printed  by  the  State  Printer,  in  all  courts 
of  justice  in  this  State,  and  in  all  proceedings  before  any  officer, 
body,  or  board,  in  which  it  shall  be  thought  necessary  to  refer  there- 
to.    [1  R.  S.  p.  184.] 

**§  10.  The  Secretary  of  State  shall  receive  every  bill  which  shall 
have  passed  the  Senate  and  Assembly,  and  have  been  approved  and 
signed  by  the  Governor,  or  which  shall  have  become  a  law  notwith- 
standing the  objections  of  the  Governor,  or  which,  not  having  been 


95 

returned  by  the  Governor  within  ten  days,  shall  have  become  a  law ; 
and  shall  deposit  such  laws  in  his  office. 

"  §  11.  He  shall  certify  and  endorse  upon  every  such  bill,  the  day, 
month  and  year,  when  the  same  so  became  a  law,  and  such  certifi- 
cate shall  be  conclusive  evidence  of  the  facts  therein  declared." 
[Ibd.  p.  157.] 

"  §  3.  No  bill  shall  be  deemed  to  have  been  passed  by  the  assent 
of  two-thirds  of  the  members  elected  to  each  house,  unless  so  certi- 
fied by  the  presiding  officer  of  each  house."     [Ibd.  p.  156.] 

It  has  been  supposed  by  some,  that  two-thirds  bills  must  have  the 
certificate  provided  in  this  last  section  attached  to  them,  or  they  are 
not  valid.  This  has  never  been  the  practical  construction  put  upon 
the  section,  as  such  certificates  have  not  been  published  to  my  know- 
ledge with  the  two-thirds  acts,  which  they  would  have  been,  if  they 
were  considered  essential  to  the  validity  of  those  acts.  The  object 
of  the  certificate  would  appear  to  be  that,  for  which  it  has  hereto- 
fore been  used,  to  apprise  the  Governor  how  the  act  has  been  passed, 
that  he  may  understandingly  exercise  his  power  of  veto.  For  if  in 
his  opinion,  a  two-thirds  bill  has  been  passed  by  a  majority  vote,  it 
is  undoubtedly  his  duly  to  withhold  his  approval. 

Other  sections  of  the  Statute  appear  to  indicate  this,  as  the  ob- 
ject of  the  certificate. 

The  fourth  section  is  in  these  words : 

"  §  4.  Every  bill  thus  passed  and  certified,  must,  before  it  be- 
comes a  law,  be  presented  to  the  Governor  ;  if  he  approves,  he  must 
sign  it ;  and  he  shall  endorse  thereon  a  certificate  of  his  approba- 
tion, and  deliver  the  same  so  endorsed  to  the  Secretary  of  State." 
[1  R.  S.  p.  157.] 

By  this  section,  when  the  Governor  approves  a  bill,  he  must  en- 
dorse on  it  a  certificate  of  his  approbation,  and  deliver  it  to  the  Sec- 
retary of  State.  His  certificate,  it  would  appear,  is  the  evidence 
on  which  the  Secretary  of  State  is  to  make  his  certificate,  as  di- 
rected by  the  eleventh  section  above  quoted. 

If  the  Governor  does  not  approve  a  bill,  and  it  is  afterwards  passed 
by  two-thirds  of  the  members  present  in  each  House,  the  presiding 
officer  of  each  House  must  certify  the  vote  thereof,  on  the  bill,  and 


96 

the  presiding  officer  of  the  House  which  last  passes  it,  must  deliver 
the  bill  so  certified  to  the  Secretary  of  State.  [See  sections  5,  6, 
7.  1  R.  S.  p.  157] 

These  certificates,  appear  to  be  the  only  authentication  in  such 
a  case,  on  which  the  Secretary  of  State  acts  in  indorsing  his  cer- 
tificate. 

If  we  give  to  the  certificates,  which  the  third  section  requires 
upon  two-thirds  bills,  the  same  force  and  effect  which  are  given  to 
the  certificates  required  upon  bills  disapproved  by  the  Governor  and 
afterwards  passed  by  two-thirds  present,  they  then,  are  no  more  than 
authentications  upon  which  the  Secretary  of  State  acts  when  he 
endorses  his  final  certificate  ;  and  certainly  they  can  be  entitled  to  no 
greater  force,  nor  furnish  any  higher  evidence  of  legislative  action. 
At  all  events,  they  are  acts  anterior  to  the  act  of  the  Secretary  of 
State,  which,  the  Statute  declares,  shall  be  conclusive  of  the  month 
and  year  when  the  bill  becomes  a  law. 

Does  not  this  necessarily  shut  out  all  inquiry  beyond  the  certifi- 
cate of  the  Secretary  of  State? — And  ought  it  not  to  do  so?  The 
consequences  of  permitting  an  investigation  before  a  jury,  of  the  cir- 
cumstances under  which  a  law  was  passed,  for  the  purpose  of  as- 
certaining whether  it  had  been  constitutionally  passed  ;  or  in  other 
words,  whether  the  members  of  the  Legislature  had  kept  their  oaths 
of  office,  and  regarded  the  Constitution,  would  seem  to  be  dangerous, 
and  certainly  would,  in  many  cases,  be  unjust,  and  might  be  fatal 
to  the  public  peace. 

The  Constitution  declares,  that,  "  A  majority  of  each  House  shall 
constitute  a  quorum  to  do  business.  (Const.  §  3,  1  R.  S.  43.)  The 
presence,  therefore,  of  a  majority  is  essential  to  the  transaction  of 
any  business,  and  especially  to  pass  a  law.  This  constitutional  re- 
quirement is  just  as  explicit  and  binding,  as  the  one  which  requires 
the  assent  of  two-thirds  of  the  members  elected  to  each  house,  to  a 
two-thirds  bill.  If  our  Courts  of  law  may  inquire,  by  a  jury,  how 
a  two-thirds  bill  was  passed,  in  the  like  manner,  they  may  inquire 
how  a  majority  bill  was  passed.     And  thus  statutes,  which  may 


m 

hare  been  rules  of  action  for  years,  and  under  which  large  amounts 
of  property  have  been'vested,  and  numerous  titles  taken,  may  be  in 
effect  abrogated  by  a  court  and  jury,  and  declared  void.  Can  a 
principle  with  such  a  consequence,  be  tolerated  ?  The  mere  state- 
ment  of  it,  produces  its  condemnation. 

If  there  is  no  reason  for  it  to  rest  upon  ;  much  less  is  there  any 
authority.     I  presume  such  an  extraordinary  investigation  has  ne- 
ver  been  witnessed  in  any  country,  where  the  distinction  is  recog-    ^ 
nized  between  statute  and  common,  or  written  and  unwritten  law. 

Besides :  Every  Bill  after  being  endorsed  by  the  Secretary  of 
State,  as  required  by  the  Statute,  is  filed  in  his  oflSce  and  becomes 
a  record.  A  record  imports  verity,  and  can  only  be  tested  by 
itself.  As  a  general  rule,  no  inquiry  in  pais  is  permitted,  which 
may  destroy  it.  It  stands  or  falls  by  itself.  This  rule,  so  just  and 
reasonable,  should  secure  us  from  exposure  to  the  hazard  of  losing 
the  protection  of  statutes,  we  have  lived  under  for  years. 

This  point,  it  is  true,  does  not  directly  arise  on  these  pleadings, 
but  a  full  discussion  of  the  subject  required  its  consideration. 

We  trust  this  Court  is  satisfied  of  the  truth  and  soundness  of 
the  three  propositions  which  I  have  attempted  to  prove,  viz., 

First:  That  the  associations  authorized  by  our  General  Bank- 
ing Law  are  not  corporations. 

Second  :  That  if  they  are,  the  Legislature  had  power  to  pass 
the  Law  in  the  ordinary  way,  by  a  majority  vote  ;  and 

Third  :  That  if  the  Law  required  a  two-thirds  vote  to  pass  it, 
such  vote  will  be  presumed  to  have  been  given. 

In  conclusion,  the  Court  will  permit  me  to  express  an  earnest 
wish,  that  they  will  find  it  consistent  with  their  duty,  to  announce 
their  decision  at  an  early  day  ;  and  with  permission  I  will  mention 
one  other  fact,  which  I  have  been  requested  to  state,*  to  induce  the 

♦Isaac  GarroWi  Esq.,  of  the  City  of  New  York,  was  present  at  the  argument  and 
made  this  request.    He  is  largely  mterested  in  the  Bank  of  Commerce,  and  next  to 

13  • 


Court  to  adopt  that  course.  It  is,  that  the  Bank  of  Commerce 
have  called  in  one  million  of  its  capital  on  the  first  of  October  next, 
a  very  large  portion  of  which,  is  to  be  paid  by  foreign  sharehold- 
ers. And  I  will  add,  on  my  own  responsibility,  that  it  must  be  a 
source  of  deep  unhappiness  to  the  high  minded  Directors  of  that 
bank,  to  see  large  sums  coming  from  Europe  on  the  credit  of 
their  names,  for  investment  in  the  institution  which  they  conduct, 
while  a  question  like  this  is  pending. 

The  country,  and  especially  the  mercantile  community,  have 
been  agitated  and  afflicted  for  so  many  years,  by  sudden  and  unex- 
pected events  connected  with  the  enactment  and  execution  of  our 
laws,  that  their  pursuits  have  become  a  burthen,  and  their  spirits 
faint.  They  long  for  quietness  and  peace  ;  and  I  can  render  them 
and  my  clients  no  greater  service,  than  to  entreat  this  Cpurt  to  give 
them  rest. 

Samitel  Ward,  Esq.,  the  President  of  it,  took,  as  I  understand,  the  most  active  agency 
in  organizing  it.  These  gentlemen  are  well  known  in  this  country  and  in  Europe,  aa 
stanmng  at  the  very  head  of  the  mercantile  and  financial  interests  of  the  United 
States ;  and  how  deeply  mortifying  it  would  be,  to  have  them,  and  others  like  them, 

placed  in  a  position,  where  they' would  be  obliged  to  confess  to  their  European ' 

pendents,  that  no  reliance  could  be  placed  on  our  institutions  and  laws. 


APPENDIX 


The  present  seems  not  an  unfit  occasion,  to  take  a  brief  view  of 
the  powers  possessed  by,  and  of  the  restraints  imposed  upon,  the  as- 
sociations authorized  by  the  General  Banking  Law. 

Their  means  and  mode  of  action  have  been  fully  considered  in 
the  preceding  argument,  and  although  not  corporations,  it  is  obvi- 
ous, they  are  fully  competent  to  conduct  the  most  extensive  banking 
operations,  with  as  great  benefit  to,  and  as  little  personal  liability 
from  the  shareholders,  as  our  incorporated  banks.  But  unless  my 
views  of  the  Act  are  entirely  erroneous,  they  will  prove  decidedly 
more  advantageous,  both  to  the  public  and  the  shareholders,  than 
the  incorporated  banks. 

The  Legislature  hcis  placed  them  on  the  broad  principles  of  free 
trade.  They  have  unrestricted  powers  to  bank,  loan  monies,  and 
deal  in  personal  securities,  in  all  ways  ipermitted  by  the  general 
laws  of  the  State. 

FmsT  :  "  By  discounting  bills,  notes,  and  other  evidences  of  debt.'' 
This  authorizes  the  associations  not  only  to  discount  in  the  ordina- 
ry  way,  but  to  discount  any  chose  in  action ;  as  a  bond  and  mort- 
gage ;  a  simple  bond  ;  an  agreement  for  the  payment  of  money  ;  an 
account  stated  ;  in  a  word,  any  legal  engagement  to  pay  money  ; 
or  evidence  of  debt.  All  of  which  may  be  safely  discounted,  by 
receiving  assignments  of  them  when  the  discounts  are  made. 


100 

Second  :  By  "  receiving  deposits."  The  power  on  this  subject 
being  general,  it,  of  course,  includes  the  right  to  agree  on  the  terms 
upon  which  deposits  shall  be  received ;  with  or  without  interest,  with 
or  without  security,  or  in  any  other  manner,  or  on  any  other  legal 
condition  the  parties  may  think  proper  to  make. 

Third  :  By  "  buying  and  selling  gold  and  silver  bullion,  foreign 
coins  and  bills  of  exchange."  These  are  ordinary  banking  opera- 
tions and  need  no  comment. 

Fourth  :  By  "  loaning  money  on  real  or  personal  security." 
This  is  a  broad  power,  and  the  same  which  is  possessed  by  all  the 
citizens'of  this  State,  and  is  not  possessed,  at  least  to  the  same  ex- 
tent, by  the  incorporated  banks.  It  enables  the  associations  to 
transact  all  the  business  usually  transacted  by  trust  companies,  and 
even  farther,  to  lend  on  an  hypothecation  of  choses  in  action  and 
goods  and  chattels. 

This  is  a  valuable  power,  and  one  which  may  be  exercised  with 
great  benefit  to  the  public,  as  it  enables  the  associations,  if  they  see 
fit  to  do  so,  to  advance  on  any  kind  of  property,  real  or  personal. 
This  would  be  a  dangerous  power,  if  belonging  to  corporations,  and 
exclusive  ;  but  as  it  may  be  exercised  by  the  whole  community,  in 
the  form  of  these  associations,  it  is  harmless.  It  is  only  unrestrict- 
ed trade. 

But,  Fifth  :  All  these  things  may  be  done,  "  in  tlie  manner  spe- 
cified in  their  articles  of  association  ;"  "  and  by  exercising  such 
incidental  powers  as  shall  be  necessary  to  carry  on  such  business." 
This  is  free  indeed.  The  manner  may  be  agreed  on  in  their  arti- 
cles of  association :  that  is,  the  manner  of  doing  all  these  kinds  of 
business.  It  may  hence,  I  think,  be  done  by  a  board  of  directors  ; 
by  a  president  and  cashier,  or  by  one ;  by  branches  or  agencies, 
one,  or  more.  In  fine,  in  any  manner,  the  interest  or  fancy  of  the 
parties  may  devise. 

The  associations  may  also  exercise  alljpowers  incident  to  these 
various  kinds  of  business.     This  leaves  nothing  unpossessed.    The 


101 

associations  are  untrammeled,  as  they  ought  to  be,  except  by  the 
general  laws  of  the  State.  And  one  of  the  greatest  benefits 
which  the  State  may  expect  from  them,  arises  from  their  liberty 
to  deal  in  public  stocks,  which  the  incorporated  banlis  have  not. 
The  Bank  of  Commerce  has  already  done  the  State  good  ser- 
vice in  this  respect,  and  like  services  may  be  expected  from  the 
other  institutions,  when  their  arrangements  for  business  shall  have 
been  completed.  This  too,  will  be  found  to  be  a  source  of  great 
profit  to  the  new  institutions,  which  is  entirely  denied  to  the  char- 
tered banks ;  and  will  prove  of  immense  advantage  to  the  other 
States  in  the  Union,  as  it  will  give  them  a  market  for  their  stocks. 

All  these  advantages  cannot  be  expected  from  the  Law,  until  ev- 
ery question  respecting  its  validity  shall  have  been  finally  settled ; 
active  opposition  from  opposing  interests  ceased  ;  and  public  confi- 
dence shall  flow  in  a  full  and  warm  current  upon  the  associations. 

The  people,  however,  after  all,  are  the  greatest  gainers  by  the 
new  system.  They  have  a  convenient  and  perfectly  safe  currency  ; 
and  also  free  competition  among  lenders — the  (wo  great  ends  of 
banking,  so  far  as  the  public  at  large  is  concerned. 

The  associations,  will,  moreover,  be  stable.  They  are  out  of 
the  reach  of  the  fluctuations  of  popular  legislation.  Every  asso- 
ciation is  a  contract  between  the  parties,  which  is  protected  by  the 
Constitution  of  the  United  States,  which  prohibits  a  state  from 
passing  a  "  law  impairing  the  obligation  of  contracts."  These 
associations,  therefore,  must  continue  for  the  periods  fixed  in  their 
articles  of  association,  and  enjoy  the  powers  given  by  the  Statute. 
A  repeal  of  the  law  will  only  prevent  any  more  from  being  organ- 
ized. Thus  we  have  a  system  of  banking  permanently  settled,  and 
no  man  can  count  the  many  blessings  it  will  be  the  means  of  con- 
ferring on  this  people. 


ERRATA. 

Page  24,  line  6,  from  bottom,  for  incorporated  read  wnincorporated. 

—  44, ,  of  second  paragraph,  the  quotation  ends  with  the  word  association. 

— >    50,  —  13,  from  top,  for  are,  read  were. 

—  72,  —  15,  from  top,  for  opinion,  read  opinions. 

The  word  in,  on  the  last  line  of  page  46,  and  the  first  two  lines  on  page  47,  to  be 
marked  as  quoted. 


O" 


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